- Amazon will launch a package-delivery service called "Shipping with Amazon," or SWA, according to a report from the Wall Street Journal.
- The service will compete directly with UPS and FedEx.
- SWA will roll out in Los Angeles over the next few weeks and then spread to other cities in the US over the course of the year.
The Wall Street Journal's Laura Stevens reported Friday the ecommerce giant will roll out the service, called Shipping with Amazon, or SWA, in Los Angeles over the next few weeks. The service will then spread to other cities around the US over the course of the year.
The company would send SWA drivers directly to retailers and warehouses to pick up parcels, cutting out other delivery services. Amazon would then be able to take the packages they pick up from vendors directly to consumers in the 37 cities where they currently make deliveries according to the report.
The plan is to start with registered third-party Amazon vendors and undercut the costs of the other delivery giants.
Amazon's creation of the new delivery service comes as the company pushes into new avenues of business including the acquisition of grocer Whole Foods and a newly-announced joint healthcare venture with JPMorgan and Berkshire Hathaway.
In response to the news, UPS' stock declined around 6.5% in pre-market trading while FedEx's stock fell by just over 5%. Amazon shares were little changed.