Amazon is reportedly gearing up to launch a Less-Than-Truckload (LTL) shipping service in the US by 2026. This comes on the heels of LTL programs abroad— first in the UK and later in Germany.

Now, Amazon is in the process of creating a Dispatch and Disruption team in the US, supporting the company's vision "to build a profitable, commercial LTL service that drives the Amazon flywheel and delights shippers with the most reliable, convenient, transparent and competitively priced service in the industry."

This potential move has sent ripples through the logistics industry— especially among established giants like UPS and FedEx. The question on everyone's mind: should they be worried?

Today, we're sharing everything we know about Amazon's new Dispatch and Disruption team and how you can leverage this news to decrease shipping expenditures.

How will Amazon's LTL affect UPS and FedEx?

Amazon has a long track record of disrupting industries. What began as an online book retailer leveraged technology, infrastructure, and a customer-centric approach to transform e-commerce, cloud computing, and now, potentially, freight. Amazon's existing logistics network, including its growing fleet of trucks and fulfillment centers, provides a solid foundation for an LTL service in the US.

Although UPS sold off their freight unit to T Force and FedEx recently spun off its own into a separate entity, adding Amazon into the mix, even as a LTL provider, would increase its visibility among parcels shippers, allowing it to target future potential customers. With already-decreased demand and diminished negotiating power, UPS and FedEx's bottom lines could be in danger if Amazon comes to market with a more integrated and cost-effective solution.

A disruption of LTL?

According to JPMorgan analysts, as told by the Wall Street Journal, "There appears to be little threat posed by Amazon to existing less-than-truckload carriers as the company reportedly explores building out its internal LTL capacity." They believe Amazon is "unlikely to make a big impact in this small niche of freight." However, with the company's technology, data-driven solutions, and access to a massive pool of sellers, we aren't writing them off just yet.

By integrating LTL shipping into its existing seller platform, Amazon could create a one-stop shop for all its logistics needs, from storage to delivery. This integrated approach could prove highly attractive to businesses seeking to simplify their supply chains.

More choice is a good thing for shippers

While FedEx and UPS likely see Amazon's expanded delivery reach through LTL as a negative, their competition benefits you as a shipper.

The logistics industry is constantly changing, and Amazon's potential LTL venture is just the latest example of this dynamic environment. While the full impact remains to be seen, one thing is certain: with ShipRx on your side, you can be sure you'll never pay too much for shipping.

The potential arrival of Amazon LTL provides valuable leverage for contract negotiations with existing carriers like UPS and FedEx. When renewing or renegotiating your shipping agreements, you can point to the impending competition and demand better rates and services.

Get in touch for a free savings analysis today and learn how ShipRx can help you leverage competition and demand to lower your shipping spending.