There are rumblings that Amazon is set to launch a delivery service as reported by the Wall Street Journal and subsequent tremors saw FedEX and UPS shares buckle.
A similar scenario to its entry into grocery and healthcare sector where there was a seismic reaction to the news that Amazon is the new player in town.
FedEx and UPS dropped -4.38% and -3.70% respectively while Amazon fell -3.59% at the time of publishing.
The world’s largest online retailer is said to be on the verge of launching a service called "Shipping with Amazon" which will deliver packages from third-party retailers on its site to customers. Amazon will roll it out in the coming weeks in Los Angeles.
The reason behind the company's foray into the delivery world is a rather pragmatic $21bn in current shipping costs as sussed by MarketWatch.
Amazon in its 2017 10-K report didn't expect any decrease in its free shipping and said “We expect our cost of shipping to continue to increase to the extent our customers accept and use our shipping offers at an increasing rate, we reduce shipping rates, we use more expensive shipping methods, and we offer additional services.”