Quick overview

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US transportation stocks fell on Monday, following Amazon. Com’s announcement of expanded logistics offerings that will make it a significant rival for parcel carriers and air freight companies, as well as affect truckers and third-party brokers.

 

FedEx shares dropped 9.1%, while rival United Parcel Service Inc. decreased by over 10%. Forward Air Corp., a logistics company, and GXO Logistics Inc. experienced double-digit decreases.

The Old Dominion Freight Line, Inc. decreased by nearly 7% among other truckers. According to Integrity Asset Management portfolio manager Joe Gilbert, the announcement is “a shot across the bow to the entire transport market.”

According to Alan Amling, a former vice president for corporate strategy at UPS, the move poses a threat not only to other couriers’ hold on e-commerce but also to more lucrative, specialized industries like healthcare, which FedEx and UPS have made a key component of their strategies.

Amazon has been expanding its distribution network with the primary goal of quick shipping for vendors on its own marketplace. The retailer is now allowing companies other than Amazon sellers to use that network. From industrial manufacturer 3M Co. to outdoor retailer Lands’ End Inc., it will provide freight, distribution, and fulfillment, and parcel shipping to independent clients. Amazon said in a statement on Monday.

Amazon can serve a growing portion of the market by providing goods transportation as a service, even when the transportation has nothing to do with the company’s primary e-commerce business. This puts UPS and FedEx at risk of losing even more business.