Amazon announced Wednesday it is opening its less-than-truckload (LTL) shipping service to all businesses, expanding beyond its own logistics network. The move triggered a sharp selloff in freight carrier stocks.
LTL service opens to all shippers
Through Amazon Supply Chain Services, the company now offers LTL shipping to any business in the United States. Previously, the service was limited to companies moving goods into Amazon warehouses and fulfillment centers. Jim Ruiz, director of Amazon Freight, said sellers had been asking for broader access. "The feedback from Amazon selling partners using our LTL service was clear," Ruiz said. He cited the service's technology, visibility, and reliability. "Now Amazon LTL can move your freight wherever it needs to go," he added.
Unlike full truckload shipping, LTL consolidates multiple customers' freight on a single trailer. Amazon claims its LTL service now reaches any destination nationwide.
Freight stocks slide after announcement
Market reaction was swift. Old Dominion Freight Line fell 5%, ArcBest dropped 4%, Saia slid 3%, and XPO Logistics also declined 5%. FedEx Freight, which spun off from FedEx earlier this month, saw the biggest drop at roughly 7% on Wednesday. The declines reflect investor concern over Amazon's deepening incursion into the traditional freight market.
Amazon has spent years building a massive logistics network for its own retail operations. Its fleet includes 80,000 trailers and 24,000 containers, plus tens of thousands of delivery vans and Amazon-branded cargo planes.
Logistics network goes external
Last month, Amazon launched an end-to-end supply chain service combining multiple freight offerings, which already pressured UPS and FedEx shares. Wednesday's LTL expansion adds another layer. The company is turning more in-house logistics tools into services for outside businesses, directly competing with established carriers.
This move marks a significant step in Amazon's transition from using its logistics network solely for itself to offering it as a service. The competitive landscape for freight carriers is being reshaped by the tech giant's wheels.