AWS Moment For Logistics? UPS, FDX, GXO Stocks Fall As Amazon Opens Up Its Freight Services To Outside Businesses

• Amazon opened up its full portfolio of freight, distribution, fulfillment, and parcel shipping capabilities to businesses of all types and sizes with Amazon Supply Chain Services.
• It stated that companies across multiple industries, such as healthcare, automotive, manufacturing, and retail, will be able to leverage ASCS for their logistics needs.
• Amazon added that several major companies have already signed up for ASCS, including Procter & Gamble, 3M, Lands’ End and American Eagle Outfitters.

Shares of freight and logistics companies tumbled on Monday after Amazon.com Inc. (AMZN) announced it is opening its logistics network to every business.

Shares of United Parcel Service Inc. (UPS) were down more than 10%, while FedEx Corp. (FDX) shares fell about 9%. GXO Logistics Inc. (GXO) was the worst affected, with its shares falling more than 13%.

Amazon shares were up about 1% in Monday’s midday trade.

AWS Moment For Logistics

The fall comes after Amazon announced Amazon Supply Chain Services (ASCS), opening its full portfolio of freight, distribution, fulfillment, and parcel shipping capabilities to businesses of all sizes, not just Amazon sellers.

Amazon stated that companies across multiple industries, such as healthcare, automotive, manufacturing, and retail, will be able to leverage ASCS for their logistics needs.

“Amazon is bringing the infrastructure, intelligence, and scale of its supply chain services—proven over decades—to businesses everywhere, much like Amazon Web Services did for cloud computing,” said Peter Larsen, vice president of Amazon Supply Chain Services.

Larsen stated that the supply chain wasn’t just another function at the company, but was at its core, driving a good shopping experience.

“And with the launch of ASCS, we’re confident we can give any other business access to the same cost efficiency, reliability, and speed that we’ve built for Amazon customers,” he added.

Amazon Web Services was launched in 2006 after the company built its internal infrastructure to run its retail operations, then realized it could package that capacity into standardized services for others.

In 2006, it launched AWS with S3 and EC2, turning that internal backbone into a public cloud platform.

Several Major Companies Sign Up For ASCS

Amazon announced that several major companies have already signed up for ASCS. This includes Procter & Gamble Co. (PG), 3M Co. (MMM), Land’s End Inc. (LE), and American Eagle Outfitters Inc. (AEO).

Procter & Gamble is utilizing ASCS to transport raw materials to its production facilities and then move the finished goods across its distribution network. 3M, Lands' End and American Eagle Outfitters are using Amazon’s logistics network for freight, inventory management and direct-to-customer deliveries across channels.

ASCS's core offerings include freight, distribution and fulfillment, and parcel shipping.

How Did Retail Traders React?

Retail sentiment on Stocktwits around Amazon trended in the ‘extremely bullish’ territory with message volumes at ‘extremely high’ levels at the time of writing.

One user called it a game-changing announcement, while adding that the AMZN stock should have been up at least 5%.

AMZN stock is up 17% year-to-date and 43% over the past 12 months. The S&P 500 ETF Trust (SPY) is up 27% over the past 12 months.

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