Amazon Grows LTL Freight Offerings for Shippers
The move expands Amazon Supply Chain Services and sent shares of major freight carriers lower, with Old Dominion down more than 6% and XPO 5%.
- On Wednesday, Amazon announced it is opening less-than-truckload shipping to all businesses, allowing companies to ship goods to any destination in the U.S. instead of only to Amazon's own facilities.
- Previously, Amazon restricted its LTL fleet to moving bulk goods inbound to its own facilities. The company has spent years building a logistics empire with 80,000 trailers and 24,000 intermodal containers to service its internal needs.
- Amazon SVP of Worldwide Operations Udit Madan said the service applies to "any volume, where it needs to go." Procter & Gamble, 3M, Lands' End, and American Eagle Outfitters are among the first shippers using the wider service.
- Shares of major freight carriers including Old Dominion Freight Line, XPO, and Saia fell on Wednesday after the announcement. Old Dominion Freight Line's stock tumbled more than 6% while FedEx Freight shares fell about 3%.
- FedEx Freight CEO John Smith told Transport Topics that LTL remains a "highly specialized industry with significant barriers to entry," dismissing Amazon's immediate competitive threat. Smith said from FedEx's perspective, "Amazon does not have the network" to run an LTL-type company.
21 Articles
21 Articles
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Freight Carrier Shares Fall as Amazon Escalates Logistics Push
Amazon is opening its partial-load shipping service to outside businesses, escalating competition with legacy freight carriers and sending shares of several of those companies lower. The e-commerce giant said on June 10 that it is expanding its less-than-truckload, or LTL, service beyond its current inbound-only model to all destinations. LTL shipping is used for freight that is too large for small-parcel carriers but not large enough to fill a …
Open-ended companies operating in this market, such as Old Dominion Freight Line, XPO and the newly sold FedEx Freight, felt the immediate impact of the announcement
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