United Parcel Service Inc. (NYSE:UPS) and FedEx Corp.(NYSE:FDX) both saw their shares fall in pre-market trading today, after a news report said online retail giant Amazon.com Inc. (NASDAQ:AMZN) is testing a new delivery service.
The Bloomberg report, which cited people familiar with the plan, said Amazon is looking to make more products available for free two-day delivery and to relieve overcrowding in its warehouses.
The service, a project Amazon is calling ‘Seller Flex’, has begun on a trial basis on the US West Coast and is expected to have a broader rollout in 2018, Bloomberg added.
As part of the service, Amazon will oversee pick-up of packages from warehouses of third-party merchants and delivery to customers, the report said, which is currently handled by UPS and FedEx.
While those couriers will still be used, Amazon will decide how a package is sent rather than leave that to the merchant, the report concluded.
In pre-market New York trading, UPS shares were down 2% at US$116.50, while FedEx lost 2.1% at US$216.70. Amazon shares were up 0.5% at US$9870.40.