On Wednesday, shares of major freight carriers experienced a notable decline following Amazon's announcement that it will extend its trucking services beyond its internal network. The e-commerce giant revealed it will offer less-than-truckload (LTL) shipping to all businesses, allowing them to ship goods to any destination in the U.S.
This service enables multiple customers to share a single trailer, which can be more cost-effective. As a result, Old Dominion Freight Line's stock dropped over 6%, while ArcBest fell 4%, and both Saia and XPO Logistics saw a 5% decrease. FedEx Freight, which recently began trading after being spun off from FedEx, also experienced a 3% decline.
Amazon's logistics capabilities have expanded significantly in recent years, reducing its dependence on external carriers and enhancing its shipping efficiency. Jim Ruiz, director of Amazon Freight, emphasized that feedback from partners indicated a strong demand for broader access to their LTL service.
This move is part of Amazon's strategy to offer more of its logistics services to external businesses, increasing competition for established players in the freight industry. The announcement has already impacted shares of rivals like UPS and FedEx, indicating a shift in the logistics landscape as Amazon continues to grow its market presence