Amazon will launch its own product delivery service starting in LA

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The digital commerce giant Amazon plans to launch its own product delivery service from companies to consumers for its own and third-party packages , which will enter into direct competition with large companies in the sector such as UPS and FedEx.

The first place where this new proposal, which will be called “Shipping With Amazon (SWA)”, would be presented in Los Angeles (California) during the next weeks , after which it would extend to the US west coast and finally to the whole country.

With this the company will be able to do without third parties to distribute their packages and will gain control over the available products in real time , considering that the shipping times are one of its great assets.

The providers of the platform will be the first clients of SWA , but later the service would be extended to other companies for all types of shipments. That is, that Amazon would provide the service offered by any traditional parcel company, such as UPS or FedEx in the United States.

The company of Jeff Bezos, which already sends its own packages to 37 US cities, has been expanding in recent years its logistical capacity : it has its own fleet of cargo planes, delivery vehicles, a network of warehouses and an airport of own load under construction.

Although the rates are not yet known, it is believed that Amazon will offer lower prices than the competition , which is already preparing for the fight: UPS will invest up to US $ 7,000 million this year in its shipping network. Anyway, both UPS and FedEx felt the cimbronazo news: on Wall Street, the first fell 6% and the second over 4%.

Other businesses

In addition to the parcel service, Amazon has just ventured into another business totally unrelated to its business. The company announced last week its intention to create a company that will serve the medical needs of all its employees , in conjunction with the JP Morgan Chase bank and the financial firm of billionaire Warren Buffett (Berkshire Hathaway).

The objective is to reduce the costs of medical care and improve the services offered to their employees and family members in the United States , although the initiative could then be extended to the rest of the country’s workers.

The health care system in the United States is totally private and is in charge of large insurers, which in some benefits receive state subsidies to assist the poorest or retired.

The three companies are among the largest private employers in the United States – with a total of 1.2 million workers – and among those with the highest market value, with a combined market capitalization of US $ 1.6 billion.

Amazon, based in Seattle, earned US $ 3,000 million during 2017, 20% more than in the previous year , and has more than 500,000 employees and annual revenues of more than US $ 170,000 million.

Sandy Komives

Sandy Komives is a graduate of Cal State. She’s based in Hollywood and has written for NPR, Motherboard, MSN Money, and the Huffington Post. In her spare time, she plays sax in a jaz trio. Sandy covers tech and science stories for LA News Watch.