(Bloomberg) -- United Parcel Service Inc. and FedEx Corp. slipped after a report that Amazon.com Inc. is preparing to start a delivery service for businesses that would compete directly with the country's largest shipping companies.
The move to pick up parcels from businesses selling on Amazon.com and delivering them to customers, reported by the Wall Street Journal following an October article by Bloomberg News, would be the latest effort by the online retailer to expand the number of shipments it handles from online purchases.
Gaining a greater share of that business, now largely handled by FedEx and UPS, would give Amazon greater control over the timing and cost of last mile deliveries to shoppers' homes. The retailer expects to roll out the new delivery service in Los Angeles in coming weeks, the Journal said, citing unnamed people familiar with the matter.
UPS fell 1.7 percent to $107.39 at 10:10 a.m. in New York. That put the stock on track for its 10th consecutive decline, its longest losing streak since 2007. FedEx declined 1 percent to $236.86, while Amazon slipped less than 1 percent to $1339.46.
There is “tremendous opportunity” in the shipment of goods from businesses to consumers and “more growth coming to the sector and UPS, irrespective of how other companies shift strategies,” said Steve Gaut, a UPS spokesman. He declined to comment about Amazon's business strategy.
Patrick Fitzgerald, FedEx senior vice president of integrated marketing and communications, said the Journal's headline, which said Amazon's delivery service would vie with the couriers, “demonstrates a lack of basic understanding of the full scale of the global transportation industry.”
--With assistance from Brandon Kochkodin and Spencer Soper
To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net.
To contact the editors responsible for this story: Brendan Case at bcase4@bloomberg.net, Tony Robinson
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