Amazon Expands LTL Services

The announcement by Amazon on June 10 of its expansion of its less-than-truckload (LTL) freight beyond its current inbound-to-Amazon offering to any type of destination, including third-party warehouses, distribution centers, and retail partners, caused transportation stocks to decline. 

 Amazon will offer seamless booking and flexible pick-up options, including next-day live pickup for orders placed by 5 p.m., same-day pickup through Amazon’s drop trailer solution, and standing daily pickups for high-volume shippers. 

Additional features include: 

• Drop trailer support. A unified drop trailer pool supports both LTL and full truckload shipments, simplifying yard operations for customers using multiple ASCS Freight services.  

• Shipment visibility. End-to-end real-time GPS tracking from pickup through delivery, proactive milestone updates, automated appointment scheduling at receiving facilities, and electronic proof of delivery — eliminating manual tracking. 

• Sensor-equipped fleet. Centralized monitoring, with cargo cameras and door sensors across the entire fleet, enabling automated driver alerts and real-time freight security from load to unload.  

• EDI integrations. Automated order tendering, shipment tracking, and invoicing connect directly to existing supply chain systems for seamless processing. 

• Experienced LTL drivers. Drivers trained specifically in LTL operations handle pickup and delivery, bringing expertise in freight handling, multi-stop routing, and dock procedures.  

Reaction to Expansion

According to CNBC, shares of FedEx Freight, Old Dominion and XPO were trading lower on June 10. 

However, this might be an overreaction, according to an article on invezz, which pointed out that analysts from Raymond James noted that even as Amazon's size and continued investment signals its goal of becoming a larger force in freight transportation, established LTL operators still possess significant advantages, including extensive terminal networks, pickup-and-delivery capabilities, and operational expertise built over decades.

"We believe this is not an immediate fundamental disruption, but the risk of a more meaningful competitive threat over time from Amazon is rising," the analysts said.

Bernstein analyst David Vernon also downplayed the near-term impact, arguing that Amazon's announcement may have generated more concern than the actual capacity being added to the market.

"Headline bigger than capacity on offer," Vernon wrote, adding that Amazon's service would not be directly comparable to the offerings of established carriers.

The article noted the view of Industry observers who said that the continued buildup of Amazon's logistics footprint has not fundamentally disrupted the transportation market.