The e-commerce behemoth has broadened its less-than-truckload (LTL) shipping service, making it available to businesses that are not part of its own supply chain. This strategic expansion triggered a sharp decline in the stock prices of several major freight carriers on Wednesday.
Previously, Amazon’s LTL service was restricted to companies shipping goods into its warehouses and fulfillment centers. Now, any business can leverage this service to transport freight across the United States. The less-than-truckload model allows carriers to consolidate shipments from multiple customers onto a single trailer, offering cost efficiency and flexibility compared to full truckload shipping.
Jim Ruiz, director of Amazon Freight, noted that customer feedback drove the decision to widen access. He highlighted the technology, visibility, and reliability that Amazon LTL provides. With this upgrade, Amazon LTL can now move freight to any destination nationwide, not just to Amazon facilities.
The announcement sent shockwaves through the freight industry. Old Dominion Freight Line saw its shares tumble by 5%, while ArcBest and Saia experienced drops of 4% and 3%, respectively. XPO Logistics also suffered a 5% decline. FedEx Freight, which recently spun off from FedEx, recorded a 7% fall. Investors clearly view Amazon’s deeper foray into the LTL market as a competitive threat to established carriers.
Amazon’s logistics network has evolved significantly over the years, encompassing cargo planes, delivery vans, trailers, and containers. The company now operates 80,000 trailers and 24,000 containers, along with tens of thousands of vans. By opening these resources to external businesses, Amazon is intensifying competition in the freight sector. This move follows the recent launch of an end-to-end supply chain service that bundles multiple logistics offerings, which had already pressured UPS and FedEx shares.
The LTL expansion is part of Amazon Supply Chain Services, which aims to provide comprehensive logistics solutions beyond warehouse-bound shipments. As Amazon leverages its infrastructure to serve a broader customer base, traditional freight carriers face increasing pressure to innovate or risk losing market share.