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Amazon said to be readying delivery service; UPS, FedEx fall

Tour of Amazon's Spheres

Online retail giant Amazon (AMZN) is reportedly creating its own delivery service for businesses in a bid to take on rivals FedEx and UPS.

Shares of FedEx (FDX) and UPS (UPS) fell in pre-market trading. Amazon's service, called "Shipping with Amazon," would pick up packages from businesses and ship them to consumers, according to The Wall Street Journal, which cited anonymous sources. 

Rumors have swirled for a while that Inc. was looking to bring some of its delivery services in house as the company looks to have more control over the increasing number of packages that it ships. The service is expected to start in Los Angeles and then expand further, The Journal said.

The service would first be offered to Amazon's third-party sellers, or businesses that sell goods through its site, the report added.

The report comes one day after Seattle-based Amazon announced that it's launching a two-hour delivery at Whole Foods this year to those who pay for its $99-a-year Prime membership. Amazon has been pushing more aggressively into delivery for a while. In August 2016 the company unveiling its first branded cargo plane, one of 40 jetliners that were expected to make up its own air transportation network.

Shares of United Parcel Service Inc. declined more than 5 percent before the market open, while FedEx Corp.'s stock dropped 4.5 percent. Amazon's shares rose slightly.

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