Shares of major less-than-truckload (LTL) transportation companies tumbled on Wednesday after Amazon announced a significant expansion of its freight business, allowing all U.S. businesses to use its LTL shipping service. The move intensified fears that the e-commerce giant would disrupt the traditional logistics market.
The selloff hit several leading LTL carriers: Old Dominion Freight Line dropped more than 5%, XPO fell 5%, FedEx Freight slid about 7% (the recently spun-off entity), while Saia and ArcBest each lost between 3% and 4%. The market reaction followed Amazon’s announcement that its less-than-truckload service, previously available only to merchants shipping into Amazon warehouses, would now be open to all customers.
The expanded service enables freight shipments of one to six pallets, or 150 to 15,000 pounds, leveraging Amazon’s massive logistics network of roughly 80,000 trailers and 24,000 intermodal containers. Jim Ruiz, director of Amazon Freight, said the decision was driven by seller demand: “The feedback from Amazon selling partners using our LTL service was clear: The technology, visibility, and reliability were exactly what they needed — and they wanted to use it more broadly.”
While investors reacted sharply, analysts urged caution. Raymond James noted that although Amazon’s scale and commitment represent a rising competitive threat, established LTL operators possess deep moats in terminal networks and decades of operational expertise. Bernstein’s David Vernon downplayed the near-term impact, saying the “headline [is] bigger than capacity on offer.” Industry observers also pointed out that freight demand is growing, allowing room for multiple players.
