Amazon set to introduce b2b delivery service in latest disruption move

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In a move that again underlines the scale of the American company's ambitions, the "Shipping with Amazon" service will pick up parcels from businesses that have sold products through Amazon's website and will deliver them to customers. Amazon would then take the packages directly to consumers in the 37 cities where it now delivers, according to the report. Amazon, which began as an online bookseller two decades ago, has grown into a powerhouse with a hand in a number of businesses, including cloud computing, drones and moviemaking.

Dubbed "Shipping with Amazon", or SWA, the new service would have Amazon picking up packages from businesses and shipping them to consumers, the WSJ noted. The thing to keep in mind here is that it will initially be restricted to companies selling goods on Amazon's own marketplace.

The service is likely to expand to other cities as well, sources told the newspaper.

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Since Amazon isn't looking to compete with big names like UPS and Fedex just yet, that's exactly the reason why it's starting small by introducing Shipping with Amazon. Stephens set a $246.00 price target on FedEx Corporation and gave the stock an "overweight" rating in a report on Wednesday, June 21st. Amazon is piloting a new service called "Shipping with Amazon" (SWA), an indication that the e-commerce giant is moving closer to becoming an integrator in its own right, reports the WSJ. However, CFRA Research analyst Jim Corridore believes Amazon's entry will not be as disruptive as others expect. Also, Director David P. Steiner sold 3,016 shares of FedEx stock in a transaction that occurred on Friday, January 5th. Since it already delivers some of its own packages, Amazon can fill extra space in its trucks with more packages, which won't add to the overhead. "Shipping with Amazon" is now intended for select third-party sellers in the test, not for businesses in general, and still it is not yet ready to roll out widely to sellers on Amazon, said the person. (NYSE:FDX) during the 4th quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. Acadian Asset Management LLC now owns 45,244 shares of the shipping service provider's stock worth $11,291,000 after purchasing an additional 17,288 shares during the last quarter.

DHL's On Demand Delivery service created to reduce failed delivery attempts and improve the receiver experience has successfully been deployed across all countries in the Americas. In the last couple of years, Amazon has expanded into ocean freight, built a network of its own drivers who can now deliver inside homes and leased up to 40 aircraft, while establishing an air cargo hub. So by taking over delivery, the company would have better control over shipping costs.

In the initial trial of the service, the person briefed on the plan said, Amazon will still rely on its current network of couriers, like UPS, FedEx and the Postal Service, to get orders from its warehouses to customers.