Issue link: https://maltatoday.uberflip.com/i/884700
maltatoday, SUNDAY, 8 OCTOBER 2017 VIII Logistics & Shipping AMAZON.COM is experimenting with a new delivery service intended to make more products available for free two-day delivery and relieve overcrowding in its warehouses, according to two people familiar with the plan, which will push the online retailer deeper into functions handled by longtime partners United Parcel Service and FedEx. The service began two years ago in India, and Amazon has been slowly marketing it to US merchants in preparation for a national expansion. Amazon is calling the project Seller Flex, one person said. The service began on a trial basis this year in West Coast states with a broader rollout planned in 2018. Amazon will oversee pickup of packages from warehouses of third-party merchants selling goods on Amazon.com and their delivery to customers' homes – work that is now often handled by UPS and FedEx. Amazon could still use these couriers for delivery, but the company will decide how a package is sent instead of leaving it up to the seller. Handling more deliveries itself would give Amazon greater flexibility and control over the last mile to shoppers' doorsteps, let it save money through volume discounts, and help avoid congestion in its own warehous- es by keeping merchandise in the outside sellers' own facilities. "Amazon's final-mile efforts reflect a logical extension of its model as it builds network density," Benjamin Hartford, a Robert W. Baird analyst, said. FedEx and UPS shares were likely to come under pressure, however, since investors could be concerned about another "data point of Amazon's encroachment on the broader logistics space," he said. UPS shares fell as much as 2.1 percent to €99.53, and were trading down 1.3 percent in New York on Friday. FedEx dipped as much as 1.6 percent to €186.06 before recovering somewhat to €220.09. "Amazon is a valued UPS customer," said Steve Gaut, a UPS spokesman. "We support all our customers with industry-leading e- commerce solutions and expect to expand these relationships further in the future." FedEx said it wouldn't comment on Ama- zon's plans but pointed out the "scale, infra- structure and complexity" involved in run- ning a global transportation network. The company said it's innovating in ways related to new services for e-commerce residential deliveries, but noted that is "only one piece of the capabilities that we provide." Last year, Amazon introduced Seller Fulfilled Prime, which lets merchants who don't stow items in Amazon warehouses still have their products listed with the Prime badge, meaning they'll be delivered within two days. The merchants had to demonstrate they could meet Amazon's delivery pledge, and many used UPS and FedEx for deliveries. The new service gives Amazon control over those deliveries in- stead, even if it continues to use third-party couriers. Amazon accounts for 5 percent to 10 percent of UPS revenue, according to analyst estimates, while FedEx has said the e-commerce giant accounts for less than 3 percent of its sales. Amazon is testing its own delivery service to rival Fedex and UPS Handling more deliveries itself would give Amazon greater flexibility and control over the last mile to shoppers' doorsteps