Amazon Opens LTL Shipping Service to All Businesses
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Source: Newsfilter
- Increased Market Competition: Amazon's announcement to open its less-than-truckload (LTL) shipping service to all businesses not only expands its logistics market reach but also poses a growing threat to traditional carriers, leading to significant stock declines for companies like FedEx Freight and Old Dominion.
- Significant Stock Market Reaction: Following Amazon's announcement, Old Dominion's shares fell over 6%, while XPO Logistics and Saia also saw declines of 5% each, indicating market concerns regarding Amazon's logistics expansion.
- Expansion of Logistics Empire: Over recent years, Amazon has significantly bolstered its logistics capabilities, now operating 80,000 trailers and 24,000 containers, thereby reducing its reliance on external carriers to enhance its shipping efficiency and speed.
- Customer Demand Driven: The director of Amazon Freight noted that feedback from partners indicated a clear need for enhanced technology, visibility, and reliability in LTL services, driving the expansion of Amazon's logistics offerings to meet the shipping needs of businesses of all sizes.
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About FDXF
FedEx Freight Holding Company, Inc. comprises a less-than-truckload (LTL) freight transportation services business, including FedEx Custom Critical, LTL Select, and other businesses. The Company's service offerings include Priority, Economy and Direct. Through its subsidiary FedEx Custom Critical, Inc., it provides expedited, time and temperature specific freight solutions, including Surface Expedite and White Glove Services. The Company operates in all states across the United States, Canada, Mexico, Puerto Rico, and the United States Virgin Islands.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Oil Price Surge: Crude oil prices rose over 2% due to escalating tensions in the Middle East, which not only exacerbated losses in stocks and bonds but also pressured airline and trucking companies, highlighting the profound impact of energy price fluctuations on the overall market.
- Stable Inflation Data: The US May Consumer Price Index rose 4.2% year-over-year, in line with expectations, while core CPI increased by 2.9%, alleviating some inflation concerns, although rising oil prices may reignite scrutiny over inflationary pressures.
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- Inflation Data Impact: The US May Consumer Price Index rose by 4.2% year-on-year, meeting expectations and marking the fastest increase in three years, which, while easing inflation concerns, still affects market sentiment and leads to more cautious expectations regarding future interest rate policies.
- Pressure on Airlines and Transport: Trucking companies are under pressure as Amazon expanded its LTL freight service, with Old Dominion Freight Line and FedEx Freight down over 4% and 3% respectively, indicating growing concerns about increased competition in the transportation sector.
- Energy Stocks Rise: WTI crude oil prices increased by over 1%, boosting energy producers like Devon Energy by more than 5%, suggesting that despite overall market weakness, the energy sector's profit outlook remains optimistic amid geopolitical tensions.
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