Amazon expands logistics reach with new shipping services—FedEx CEO weighs in

Amazon has launched Amazon Supply Chain Services (ASCS), the company announced last week in a press release. The new service opens its vast logistics network to businesses beyond its marketplace sellers. Companies in healthcare, automotive, manufacturing, and retail can now tap into freight, distribution, fulfillment, and parcel delivery.

ASCS picks up inventory from manufacturing sites. It handles cross-border shipping, customs clearance, and ground transport. Businesses can store goods in bulk and manage replenishment across sales channels.

Subscribe to Chicago Star’s Weekly City Buzz Newsletter

Key services and early adopters

The offerings include full truckload, less-than-truckload, intermodal, and air freight. Inbound shipping from China to the U.S. comes with customs help, Amazon confirms. Parcel options promise two-to-five-day delivery seven days a week.

Amazon leverages over 200 U.S. fulfillment centers, 80,000 trailers, 24,000 intermodal containers, and 100-plus aircraft. A centralized console lets firms sign up easily, as reported by AboutAmazon.

Early users include Procter & Gamble and 3M for freight to move goods and raw materials, Amazon’s website states. Lands’ End fulfills orders across channels using Amazon’s inventory pool. American Eagle Outfitters ships online orders nationwide.

“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,” Peter Larsen, VP of Amazon Supply Chain Services, per the press release.

Read more on Chicago Star

• Tragic loss shocks NBA as Memphis Grizzlies forward Brandon Clarke passes at 29

• Progress in the life expectancy gap passes pre-pandemic levels for Black Chicagoans 

• Apple faces $250M iPhone AI settlement—users may get up to $95 per claim 

• AMD shares hit a record high, adding over $86 billion in market value 

• The end of an era: Ted Turner, CNN founder and media pioneer, dies at 87

FedEx CEO dismisses threat

The May 4 announcement shook rivals. According to CNBC, FedEx shares fell 9% that day but recovered half the losses. UPS dropped 10.5% initially, up just 2% since.

FedEx CEO Raj Subramaniam brushed it off. “Last week's announcement versus what FedEx operates is completely different,” FedEx CEO Raj Subramaniam told Jim Cramer on CNBC's "Mad Money," according to CNBC. He called Amazon's move a third-party logistics play, not a true global end-to-end network.

“The true network is something you can pick up in any one part of the world and get it to any other part of the world in a couple of days,” Subramaniam said, per CNBC. FedEx's third-party logistics is a $2 billion segment, the report confirmed, small next to its $93 billion fiscal year projection.

Barclays analysts deemed it “more noise than risk,” viewing it as a rebrand of existing services, CNBC reported. Amazon remains a key FedEx customer in their renewed partnership.