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Amazon to Launch its Own Delivery Fleet

Retail giant Amazon is known for disrupting industries, and the next one in line may be the trucking industry as various sources have reported that the company is now thinking of starting its own delivery fleet to meet demand. This comes after increasingly high expectations from consumers for shipping goods. 

Amazon Prepares to Test the Waters

Jeff Bezos, Amazon's CEO, has expressed interest his company becoming an important part of the delivery process before after his company experimented with drone delivery in 2015. Now, it seems Amazon will start a service called "Shipping With Amazon" that will use typical delivery trucks instead.

The Wall Street Journal reported the service is expected to start testing in Los Angeles, CA, and then roll out across several other areas over the course of the rest of 2018. From there, Amazon will continue to expand the service if the tests go well.

There's a Ways to Go Before the Service is Competitive

While the online retail company has a long way to go before it can rival companies like UPS or FedEx, it has shown in the past that it has what it takes to become a major player in a variety of industries. According to Money, Amazon leased 40 airplanes and built up a corps of delivery drivers recently, and it also noted that Amazon is currently sitting on over $20 billion in cash that it can use to invest as it pleases. 

The entrance into the shipping business would likely take many years to fully implement, but with that kind of capital to invest in personnel, infrastructure, and vehicles, Amazon is positioned well to get started. Neil Saunders, managing director of GlobalData Retail, told Money that Amazon's shipping business will build "slowly at first" and as time goes on it will speed up.

He also said that Amazon may undercut FedEx and UPS rates just to gain market share at first and then raise prices as it becomes a bigger player in the industry. This competition at the delivery truck level would likely lead to better prices for consumers, but it's unclear what it would mean for the shipping industry as a whole.