Amazon is preparing to launch its own shipping service, "Shipping with Amazon," or SWA, which will directly compete with FedEx and UPS, The Wall Street Journal reports.
SWA will roll out exclusively in Los Angeles in the coming weeks after a pilot program that began more than a year ago, and will service third-party businesses that sell products through Amazon's website. In the long term, Amazon plans to expand SWA to other cities and open it up to outside businesses, too.
The company already delivers some of its own orders in almost 40 U.S. cities, and SWA's model will involve picking up business' packages when convenient, a structure that would "undercut UPS and FedEx on pricing," the Journal writes:
For its "Shipping with Amazon" option, the online retail giant is expected to be able to offer lower prices than UPS and FedEx because it already delivers some of its own packages — any extra space it can fill in its trucks with additional deliveries is considered added revenue, according to people familiar with the company's thinking. [The Wall Street Journal]