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Amazon's New Delivery Service To Take On UPS, FedEx

Amazon is testing a new delivery model that will make more products available for two-day service and avoid overcrowding in its warehouses.


The tech titan plans to limit the number of deliveries handled by UPS and FedEx, and instead will lead most of its own pickup and delivery service. Using this new model, Amazon will also pick up and deliver packages from third-party vendors that sell products through its site, Bloomberg reports.

News of the proposed program, dubbed Seller Flex, caused FedEx and UPS stocks to fall more than 1.5% on Thursday, CNBC reports.

The program first rolled out in India but is being tested on the West Coast and is expected to begin its official expansion in 2018.

This is not the first push from Amazon to increase the speed of its deliveries and give shoppers more access to goods using an innovative approach.

Fulfillment by Amazon allows merchants to ship items to Amazon warehouses across the U.S. in order to store, pack and ship them to customers. However, this approach has been known to cause issues and backups, something Amazon hopes to solve with its new delivery service. Drone hives and underwater warehouses have also been among the retailer's more recent fulfillment ideas.