Amazon's Delivery Service Aims to Reduce Cost, Not Replace FedEx, UPS

At least for now.


Amazon is launching another service that might make the e-commerce giant even more ubiquitous than it already is.

On Friday it was reported that the company is preparing to roll out a delivery service called “Shipping with Amazon,” or SWA for short. This new parcel service will being operation in the Los Angeles area within the next few weeks and will be dispatching merchandise from third-party vendors that do business on Amazon’s website.

According to anonymous sources interviewed by The Wall Street Journal, Amazon could expand their new delivery service to other cities as early as this year.

While this move seems to be in direct competition with other delivery companies, namely UPS and FedEx, it’s unlikely that Amazon will sever ties with these delivery firms.

Flickr / David Guo's Master

In the WSJ report, the same anonymous sources stated that SWA will provide a cheaper service than UPS and Fedex, but it will be in such a small area that it won’t even matter.

Furthermore, these companies have been in business for so long that they’ve developed an indispensable delivery network and infrastructure for Amazon. SWA will only be delivering certain packages in or around Los Angeles to start with. The millions of people around the world who order things on Amazon every day still need a way to get their books, cosmetics, and video games.

If SWA beings to expand wildly, proves to be a more reliable service, and is, in fact, cheaper than the others then some tension might begin to brew between Amazon and its delivery partners. But as of right now, this is simply a test of a new concept. Amazon needs delivery services as much as much as we need Amazon, at least for now.

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