5 Supply Chain Businesses Amazon Is Slowly Disrupting

Amazon spent nearly three decades building a logistics network to support its own retail business. Now, it is increasingly turning that infrastructure into a logistics business in its own right.

The scale is already significant. In 2025, Amazon Logistics delivered an estimated 6.7 billion packages in the U.S., giving it 27.9% of the country's parcel volume and making Amazon the largest U.S. parcel carrier by volume for the first time. Its network now includes more than 80,000 trailers, 24,000 intermodal containers and 100 aircraft. In May, Amazon opened that infrastructure to outside businesses through Amazon Supply Chain Services (ASCS), followed by the expansion of its LTL offering in June.

That puts Amazon in an unusual position. It is no longer simply a retailer that happens to operate a large logistics network. It is increasingly competing with the companies that traditionally move, store, and deliver goods for other businesses.

Here are five supply-chain businesses now sitting in Amazon's crosshairs.

Amazon has already achieved something that would have seemed unlikely a decade ago: it has become the largest parcel carrier in the U.S. by volume.

ShipMatrix estimates that Amazon handled 6.7 billion domestic packages in 2025, compared with 6.6 billion for USPS, 4.4 billion for UPS and 3.6 billion for FedEx. That gave Amazon 27.9% of U.S. parcel volume, versus 27.6% for USPS, 18.6% for UPS and 15.1% for FedEx. The overall U.S. parcel market reached 23.9 billion packages last year.

Revenue tells a different story. The U.S. parcel market generated about $196 billion in revenue in 2025, with UPS at $58.3 billion, FedEx at $51.7 billion, Amazon Logistics at $40.5 billion and USPS at $32.5 billion. Amazon therefore accounted for about 21% of parcel revenue, even though it carried almost 28% of the packages.

That gap reflects the economics of Amazon's network. The company primarily moves its own retail orders, giving it enormous package density and allowing it to design transportation around its fulfillment network rather than competing purely for external shipping contracts.

Now Amazon is opening that network to those external customers.

Through Amazon Supply Chain Services, companies can use Amazon's parcel network for orders placed through their own sales channels. American Eagle, for example, is using Amazon to deliver orders from its American Eagle and Aerie websites. Amazon says the service offers two-to-five-day delivery, seven days a week.

That changes the relationship with UPS and FedEx. Amazon is no longer simply one of their largest customers; it can increasingly compete for the retailers and brands that generate their volume.

The distinction matters because Amazon doesn't need to win half of the parcel market to build a meaningful business. It already has the routes, fulfillment centers, delivery stations, and package volume. Every third-party package added to that network creates an opportunity to generate additional revenue from infrastructure Amazon has already built.

Amazon's position in less-than-truckload (LTL) is very different from its position in parcels. It is a newcomer rather than a market leader.

That distinction is important because the U.S. LTL market is dominated by specialized carriers with decades of experience. FedEx Freight generated $8.8 billion in revenue in fiscal 2026, while Old Dominion generated about $5.45 billion from LTL services in 2025. These companies operate dense terminal networks designed specifically for consolidating and moving palletized freight.

Amazon does not currently disclose a comparable LTL revenue figure or market share, so it would be misleading to suggest that Amazon has already captured a meaningful percentage of the market.

What Amazon does have is infrastructure.

Amazon Freight reached 80,000 dry-van trailers in North America in March 2026, up from 70,000 a year earlier. The broader network also includes 24,000 intermodal containers, and Amazon says it works with more than 50,000 vetted carriers.

Amazon has been offering LTL to its sellers and vendors since 2019, and says that service moved millions of pallets in 2025. In June, the company expanded it beyond freight destined for Amazon facilities. Businesses can now use Amazon LTL to ship one to six pallets, or roughly 150 to 15,000 pounds, to their own warehouses, third-party distribution centers, retail partners and distributors.

That is a meaningful change in the proposition. Amazon is no longer using LTL simply to improve the economics of getting inventory into its own network. It is asking manufacturers, retailers and other shippers to use Amazon as the carrier for freight that may never touch an Amazon facility.

The company's advantage is the same one that helped it build its parcel operation: volume first, monetization second.

Amazon has enormous transportation demand generated by its own business. If it can use that demand to build a dense freight network and then fill additional capacity with third-party shipments, it can approach the LTL market from a fundamentally different starting point than a new carrier

The threat is that Amazon now has the infrastructure and freight density to gradually build one.

Third-party logistics providers may have the most to lose from Amazon's latest move because Amazon is no longer competing with them on a single service.

It is beginning to offer the entire package.

The global third-party logistics market reached approximately $1.3 trillion in 2025, according to Armstrong & Associates, while U.S. 3PL revenue reached about $323.4 billion. The industry includes transportation management, warehousing, distribution, freight forwarding, and other outsourced logistics services. Armstrong also estimates that 94% of Fortune 500 companies now work with at least one 3PL, demonstrating how deeply embedded these providers are in corporate supply chains.

Amazon is already enormous by the industry's own measures. Armstrong ranked Amazon as the No. 1 3PL globally by gross logistics revenue in 2025, at approximately $172.16 billion. That figure needs an important qualification: it is based largely on Amazon's marketplace fulfillment and related third-party seller services, so it should not be interpreted as $172 billion of pure contract-logistics revenue. Even so, Amazon's ranking illustrates how large its existing logistics business has become.

The new ASCS offering makes that scale available beyond Amazon's marketplace.

Amazon says ASCS combines freight, distribution, fulfillment and parcel shipping. Its first announced customers include P&G, 3M, Lands' End and American Eagle. P&G is using Amazon's freight services to move raw materials to production facilities and finished products through its distribution network, while 3M is using the service to move products from manufacturing sites to distribution centers. That is a very different customer proposition from traditional Fulfillment by Amazon.

For years, a company could hire Amazon for a particular part of its logistics operation—fulfillment for marketplace orders, for example—while using other providers for freight, warehousing or distribution. ASCS brings those capabilities together.

And Amazon has a particularly formidable asset behind it: the infrastructure it already built for its own retail business. The company's 2025 annual report shows more than 520 million square feet of fulfillment, data-center, and other facilities in North America, including both leased and owned space.

That creates an unusual competitive model. A conventional 3PL has to build or lease warehouses, develop transportation relationships, invest in technology, and win customers to generate enough volume to justify the network. Amazon already has the network. It now needs to convince other companies to use it.

Amazon's last-mile operation is where its logistics strategy is perhaps most visible to consumers, but the scale behind it is easy to underestimate.

Amazon says its delivery network includes more than 100,000 vans and more than 390,000 Delivery Service Partner drivers worldwide. Its Delivery Service Partner program has created roughly 4,400 independent delivery businesses, giving Amazon a large distributed workforce without requiring the company to employ every driver directly.

That network is already supporting billions of deliveries.

The 6.7 billion U.S. packages Amazon handled in 2025 work out to roughly 18.4 million packages a day. At that volume, even small improvements in route density, vehicle utilization, or delivery time can translate into substantial changes in network economics.

Amazon is now trying to push the network beyond conventional parcel delivery.

Amazon Now is expanding its ultra-fast delivery offering, while Prime Air is moving toward a much larger drone network. Amazon says Prime Air plans to reach nearly 500 U.S. cities and towns by the end of 2026, approximately six times its current footprint. The company says its drones can deliver millions of eligible items in as little as 30 minutes, and that its existing 11 drone sites are already making thousands of deliveries each day.

That is important because Amazon is attacking the last mile on multiple fronts at once.

Its conventional delivery network handles enormous package volumes. Its same-day infrastructure moves selected inventory closer to customers. Its Delivery Service Partner network provides local delivery capacity. And its drone operation is designed to eliminate the road journey altogether for certain orders.

The economics of last-mile delivery are heavily influenced by density. A delivery company that has only a handful of packages in a neighborhood has very different economics from a network moving millions of packages every day.

Amazon has the density. It also controls much of the inventory and fulfillment infrastructure feeding that last mile.

That combination is difficult for a standalone delivery company to replicate. A local courier can provide the delivery vehicle, but it does not necessarily control the inventory, fulfillment center, customer relationship and transportation network upstream of that vehicle. Amazon increasingly controls all four.

The final piece of Amazon's logistics expansion is happening further upstream, where international freight enters the supply chain.

Amazon Global Logistics already provides door-to-door ocean and air freight, allowing sellers to move inventory from manufacturers into Amazon's fulfillment network. The service covers origin pickup, cross-border transportation, customs clearance and delivery into Amazon facilities.

ASCS now broadens that proposition. Amazon is combining international freight with domestic transportation, warehousing, fulfillment and parcel delivery. That means a manufacturer can increasingly use Amazon for multiple stages of the journey rather than hiring a separate provider for every leg.

Amazon is not yet comparable to the world's largest freight forwarders in international freight volume. Kuehne+Nagel, for example, handled about 4.33 million TEUs of ocean freight in 2025, while DSV handled 3.70 million. Amazon does not rank alongside those companies among the world's leading ocean freight forwarders. That makes this a growth story rather than a current market-share story.

But Amazon has something that traditional forwarders cannot easily replicate: the ability to connect international transportation directly to one of the world's largest domestic fulfillment and delivery networks. That integration matters to manufacturers and retailers.

A shipment does not end when it clears customs. It has to move to a warehouse, be positioned against demand, potentially be replenished across a distribution network, and ultimately reach a customer.

Amazon is increasingly offering to handle those steps as one connected system. For freight forwarders, the risk is therefore not necessarily that Amazon suddenly captures a huge percentage of global ocean freight.

It is that Amazon begins compressing the number of providers a shipper needs.

A company that previously needed a freight forwarder for international transportation, a domestic transportation provider for inland movement, a warehouse operator for storage, a 3PL for fulfillment, and a parcel carrier for final delivery could increasingly use Amazon for several of those functions.

Amazon's logistics expansion makes more sense when these businesses are viewed as parts of one network rather than five separate markets.

The company has already built the physical infrastructure: more than 80,000 trailers, 24,000 intermodal containers, more than 100,000 delivery vans and a parcel network that handled 6.7 billion U.S. packages last year. It has also built the technology needed to forecast demand, position inventory, book freight and track shipments.

For years, Amazon had to absorb the cost of that infrastructure because it primarily existed to support Amazon's own retail business.

ASCS changes the economics.

Amazon can now take infrastructure that already exists and sell access to it to manufacturers, retailers and other businesses. P&G can use Amazon for freight. American Eagle can use it for parcel delivery. Other companies can use its LTL, fulfillment and distribution capabilities. That creates a model that looks remarkably similar to the logic behind Amazon Web Services.

Amazon first built the infrastructure for itself. Once it had enough scale, it discovered that other companies would pay to use it. The difference is that AWS disrupted a technology industry. Amazon Supply Chain Services is attempting to do the same thing to logistics.

Amazon does not need to eliminate UPS, FedEx, Old Dominion, DHL or the major 3PLs for the strategy to work. It only needs to take enough pieces of their customers' supply chains to become a meaningful alternative. And unlike a new logistics entrant, Amazon already has the volume, infrastructure and customer relationships to start from a position of scale.

The question is no longer whether Amazon is becoming a logistics company. It is how much of the supply chain Amazon can turn into a service business.