As of June 10th, Amazon’s LTL services are available to all third parties. This is the next step in a long progression towards expanded transportation and supply chain services.
They developed a warehouse check-in app called Amazon Relay in 2017 and launched a load board in 2018. Amazon started offering third-party full truckload 4 years ago. In May, they launched Amazon Supply Chain Services, opening freight, distribution, fulfillment, and small parcel shipping to non-Amazon shippers.
With Amazon's LTL service, customers can move between 1 and 6 pallets, weighing from 150-15,000 pounds, and the whole fleet is sensor-equipped for security. Shippers will have extensive visibility into their goods the whole time.
As Amazon Freight Director Jim Ruiz said, "We built an asset-backed LTL service." But are their investments in equipment, real estate, and drivers enough to meet the expectations (or match the fears) being expressed by shippers and traditional carriers?
Morgan Stanley did some research and found that of the 87 shippers they contacted, 11 percent had already been contacted by Amazon about their LTL services – a reasonably high percentage in Morgan Stanley’s opinion. 60 percent of the shippers they spoke with said they would consider Amazon for LTL, and 81 percent don't use Amazon for other supply chain services.
Morgan Stanley positioned this finding as "reinforcing that Amazon's LTL efforts are largely a new point of entry rather than an extension of existing carrier relationships."
Amazon already has some prestigious names on their customer roster (including Procter & Gamble, 3M, American Eagle Outfitters, and Lands' End) and are clearly looking to add new names rather than focusing on internal cross-selling.
Who will Amazon LTL compete with?
Amazon has been touting their 80,000 trailers and 24,000 intermodal containers in all of the press coverage, but there is a question about whether they own enough equipment and employ enough drivers to deliver this service nationwide, or whether they are operating like a freight broker.
The answer to this question will determine where they compete most directly. If Amazon LTL is truly asset-backed, they will go head-to-head with FedEx Freight, Old Dominion, Saia, XPO, and Estes. If they function as more of a freight broker, they will be stepping on the toes of C.H. Robinson and Echo Global Logistics.
If we compare their operational numbers, Amazon isn't even close to matching the physical presence of companies like FedEx Freight and Old Dominion. Amazon has about 30 LTL terminals, while FedEx Freight has 365 and Old Dominion has over 250.
Here's another example: estimates on the number of Amazon's cross-dock facilities are around 100, while the top 5 carriers have an average of 300 each.
The Loadstar, a supply chain publication, asked Amazon about their network of LTL terminals and if they are planning to invest in physical infrastructure or hire others to close the gap.
According to the article, "A spokesperson said Amazon Freight contracted with carriers for pick-up and delivery for the LTL service, but provided no details on the nature of the facilities used, other than the company has terminals and will add more this year."
Reimagining the LTL Shipping Experience
While I was reading the news coverage, it struck me how much of the messaging was about experience. It practically suggested a consumer-level of experience… something Amazon is well known for.
It reminded me of something I heard once about the difference between Home Depot and Lowe's… no offense to either company, but I think it makes the point.
Home Depot is a store for contractors that ‘regular people’ are allowed to shop in, too. Locations are deliberately bare bones and make you feel serious about the job you're working on. Lowe's offers an approximation of that. They give shoppers the impression that they are shopping where the contractors shop (and some do), but they offer a more consumer-oriented experience. It is a bit more polished, and stores have more signage and more attractive displays, even if they use the large warehouse format and offer a wide range of products and materials.
The Amazon LTL positioning feels more Lowe's to me than Home Depot.
How many times have most procurement professionals had to answer a stakeholder question about why their B2B eProcurement system can't function more like Amazon? So we don’t need to check their customer experience credentials.
Amazon's freight platform is built on the same infrastructure behind their e-commerce logistics. That includes real-time visibility, predictive routing, automated capacity optimization, and seamless integration with supply chain tools.
They are providing an improved shipping experience with this LTL service.
Most legacy carriers still rely on manual processes for appointment scheduling, paper-based proof of delivery, and limited shipment visibility once freight leaves the origin terminal. This opens the door to all of the stories we hear about freight theft – the process is just too low tech and human dependent.
Amazon's offering includes sensor-based monitoring, automated scheduling, and GPS tracking as baseline features, not premium add-ons.
Amazon's LTL launch is best understood not as a finished product, but as a deliberate first move. It builds on years of quiet infrastructure investment and a customer experience reputation that precedes them into every new market they enter.
The open question isn't whether shippers will be curious; the Morgan Stanley data makes clear they already are. What remains to be seen is whether Amazon's digital strengths can compensate for a physical footprint that still has a long way to go before they can match the carriers they are challenging.
