Amazon’s trucking expansion causes cargo inventory to decline

Shares of several major freight forwarding companies fell sharply on Wednesday. Amazon announced that it will open up its trucking services to companies beyond its network.

The e-tailer announced that as part of its nascent Amazon Supply Chain Services program, it will offer less-than-truckload shipping to all businesses, as well as those shipping products to their own warehouses or fulfillment centers for delivery to any destination in the United States.

Less-than-truckload refers to services in which a company carries loads from multiple customers in a single trailer, rather than a truckload from one customer.

old dominion freight line‘s stock price fell more than 6%, while arc vest It fell 4%. Saia and XPO Logistics They each fell 5%. shares of fedex cargowhich was spun off from FedEx and began trading earlier this month, has fallen about 3%.

Over the past few years, Amazon has built up its logistics empire and reduced its dependence on outside carriers, primarily to serve its own needs and keep pace with increasingly faster delivery speeds. This includes Amazon-branded cargo planes, tens of thousands of delivery vans, and a growing cargo service that includes 80,000 trailers and 24,000 containers.

“The feedback from Amazon’s reseller partners who use our LTL service was clear: the technology, visibility, and reliability were exactly what they needed, and they wanted to use it more broadly,” Jim Ruiz, director of Amazon Freight, said in a statement. “Amazon LTL now allows businesses of all sizes to get their freight where it needs to go, serving destinations across the country.”

Amazon is making its logistics services accessible to other companies, increasing the threat to industry incumbents.

Last month, Amazon announced an “end-to-end” supply chain service that combines several of its logistics and freight services into a single package. The announcement sent shares of rival carriers soaring. UPS and fedex lower.