Amazon will soon launch “Shipping With Amazon,” a delivery service for businesses that costs less than UPS and FedEx. The service will be available to merchants in the Los Angeles area in the coming weeks, and could expand to other cities later this year. UPS and FedEx both saw their stock plunge more than 5% after the news broke.

We predicted a year ago that Amazon would “squarely go after” UPS and FedEx:

 

We also predicted how the market would react to such a move:

 

This makes sense: Retailers can’t get things to you as quickly as Amazon, which is making the investments they can’t afford to make — from warehouses run by robots to powerful fleets of trucks and even cargo planes. Amazon already delivers many of its own orders, which would help the company undercut UPS and FedEx. With grocery and fashion domination already in the works, fulfillment seems like the next logical sector for the e-commerce behemoth to overtake.

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