Shares of UPS and FedEx each tumbled roughly 10% on Monday after Amazon announced it would open its global logistics network to external businesses, marking a direct assault on the traditional parcel delivery market.
The new service, called Amazon Supply Chain Services, allows companies to utilize Amazon’s vast infrastructure—including its fleet of over 100 cargo planes, warehouses, trucks, and sorting hubs—to move raw materials and finished goods. Crucially, it is not limited to sellers on Amazon’s marketplace; any business, even those using competing platforms, can tap into the network for fulfillment, ocean and air freight, and trucking.
The move positions Amazon as a full-scale third-party logistics provider, intensifying competition at a sensitive time. UPS has been reducing its reliance on Amazon volumes, while FedEx recently resumed ties after ending the relationship in 2019. Monday’s drop was the steepest single-day decline for both stocks in over a year, with UPS closing at $96.31 and FedEx at $357.80.
Major corporations, including Procter & Gamble, 3M, and American Eagle Outfitters, have already signed on as early adopters. Amazon is targeting the lucrative business-to-business segment, where deliveries are more predictable and profitable than consumer shipments.
The strategy mirrors the trajectory of Amazon Web Services, which evolved from internal infrastructure into a dominant cloud business. “The move is Amazon trying to convert logistics from a cost burden into an infrastructure product,” said Parth Talsania, CEO of Equisights Research, calling it a “structural warning shot” for incumbents.
While Amazon shares edged up 1.4%, the broader market slipped, with the S&P 500 down 0.53%. The announcement raises the specter of price wars and margin compression across the logistics sector just as investors were hoping for a recovery in shipping volumes in 2026.
