Amazon to Launch Delivery Service that Competes with FedEx, UPS

The company is preparing to begin the offering in Los Angeles with its ‘third-party merchants’ and then roll it out more broadly

Amazon.com Inc. is preparing to launch a delivery service for businesses, positioning it to directly compete with United Parcel Service Inc. and FedEx Corp.

Dubbed “Shipping with Amazon,” or SWA, the new service will entail the tech giant picking up packages from businesses and shipping them to consumers, according to people familiar with the matter.

Amazon AMZN expects to roll out the new delivery service in Los Angeles in coming weeks with third-party merchants that sell goods via its website, according to the people. Amazon then aims to expand the service to more cities as soon as this year, some of the people say.

While the program is being piloted with the company’s third-party sellers, it is envisioned to eventually be opened to other businesses too, according to some of the people. Amazon is planning to undercut UPS UPS and FedEx FDX on pricing, although the exact rate structure is still unclear, these people said.

Article originally published by Laura Stevens at marketwatch.com