By Al Root

FedEx stock dropped early Monday on fears that Amazon.com wants some of its business.

Shares of the shipper were down 6.5% at $368.43, while the S&P 500 and Dow Jones Industrial Average were flat and down 0.5%, respectively.

The move came after Amazon introduced "Amazon Supply Chain Solutions," which aims to provide distribution, warehousing, and last-mile delivery to "any business."

It sounds a lot like what FedEx does -- and it is. Amazon, as it has grown, has built out its logistics capabilities, internalizing some of its shipping needs and offering services to its third-party sellers. This marks the next step in that expansion.

To be sure, it's a competitive threat. And Amazon has a history of disruption. "This story may sound familiar. Amazon built another major offering -- cloud infrastructure -- for the same reason: to run its own business better," said the company in a news release. "And then Amazon started selling it. That's how Amazon Web Services (AWS) was born, and it's transformed how the world builds and runs software. Now, Amazon is ready to do that for the supply chain."

Cloud infrastructure was new. There was no FedEx of the cloud before Amazon jumped in. Shipping is more mature. Historically, there has been enough growth for logistics providers, including FedEx, even as large organizations, such as Walmart and Amazon, have adapted their logistics strategies.

It might be the same competitive threat that has existed for years. But that's little comfort to FedEx investors on Monday, who will have to watch how Amazon Supply Chain Solutions grows and develops.

The announcement comes at an interesting time for the industry. UPS is leaving some Amazon business behind. The USPS and Amazon also ran into issues with pricing. FedEx is doing business again with Amazon after walking away in 2019. All that is happening as investors expect a shipping volume rebound in 2026 following a brutal three-year post-COVID freight recession.

Write to Al Root at allen.root@dowjones.com

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May 04, 2026 11:28 ET (15:28 GMT)

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