Amazon Puts Its Logistics Muscle on the Market, Sending UPS and FedEx Reeling

Amazon opens its logistics network to third parties with ASCS, echoing AWS's success, as Q1 revenue hits $181.5B and stock reaches new highs.

Amazon is taking a page from its own playbook — the one that turned Amazon Web Services into a cloud computing juggernaut — and applying it to the physical world. The company has launched Amazon Supply Chain Services (ASCS), opening its vast internal logistics network to outside businesses for the first time. The move rattled the transportation sector, with shares of UPS tumbling nearly 10% and FedEx sliding as much as 7.4% on the day of the announcement.

The parallels to AWS are deliberate. Just as Amazon once turned its excess server capacity into a dominant cloud business, it now aims to monetize a logistics empire built to serve its own marketplace. That empire is staggering in scale: more than 200 U.S. distribution centers, a fleet of over 80,000 trailers, and 100 cargo aircraft. Companies like Procter & Gamble, American Eagle, and 3M are already using parts of this infrastructure to move raw materials or fulfill online orders.

Peter Larsen, Amazon's vice president of the new logistics unit, framed the offering as a natural extension of the company's track record. The service handles everything from freight transport and warehousing to last-mile delivery and customs clearance — a full-stack supply chain solution that threatens established players like UPS, FedEx, DHL Supply Chain, and Maersk Logistics. The addressable third-party logistics market is worth more than $1.3 trillion globally.

To ease concerns about data misuse, Amazon has drawn a clear line: it will not use logistics customer data to inform its own marketplace decisions, a sensitive issue given past allegations that the company mined seller information for competitive advantage.

The logistics offensive comes alongside a blockbuster first quarter. Revenue surged 17% to $181.5 billion, while AWS posted 28% growth — its strongest performance in nearly four years. The cloud unit's backlog swelled to roughly $365 billion. Yet the heavy spending required to sustain that momentum is weighing on free cash flow. Capital expenditures jumped nearly $60 billion year-over-year as Amazon pours money into AI infrastructure and data center upgrades.

In Europe, the company has pledged €15 billion in investments over the next three years, targeting new logistics sites and AI capacity. That spending underpins both the physical and digital foundations of the ASCS rollout.

Investors have cheered the dual narrative of logistics expansion and cloud acceleration. The stock hit a fresh 52-week high of $278.56 on Wednesday, following a new annual high of €234.25 in European trading the day prior. Several analysts have raised their price targets in response: BNP Paribas Exane lifted its target to $345, Evercore to $315, and Stifel Nicolaus to $319.

For the current quarter, management guided for revenue of up to $199 billion. With AWS growth accelerating and the logistics business opening a new revenue stream, that forecast looks increasingly attainable.