Amazon Opens LTL Service to All; LTL Stocks Slip

Amazon expanded its less-than-truckload (LTL) shipping service to all customers on Wednesday, and shares of major LTL carriers fell after the announcement. Old Dominion Freight Line dropped more than 5%, while XPO, FedEx Freight, Saia and ArcBest declined about 3% to 4%.

The expanded service accepts shipments of one to six pallets, roughly 150 to 15,000 pounds, and uses a network Amazon describes as about 80,000 trailers and 24,000 intermodal containers. The offering had been limited to merchants moving goods into Amazon warehouses and is now available to a wider set of shippers, with real-time tracking and reliability at a price below full truckload options.

Jim Ruiz, director of Amazon Freight, said the change responds to demand from current customers: “The feedback from Amazon selling partners using our LTL service was clear: The technology, visibility, and reliability were exactly what they needed — and they wanted to use it more broadly.”

LTL shipping serves companies whose freight volumes are too small to fill an entire truck. The segment operates through networks of terminals, regional hubs and pickup-and-delivery routes that consolidate many smaller shipments into shared truckloads.

Investors noted the expansion as part of Amazon’s broader logistics build-out. Earlier this year Amazon rolled out a Supply Chain Service platform offering warehousing and distribution solutions; that launch previously pressured UPS shares.

Raymond James highlighted Amazon’s scale and investment plans while pointing to advantages held by incumbent LTL operators, including extensive terminal networks and pickup-and-delivery expertise. The firm said the expansion is not an immediate fundamental disruption but increases the risk of a larger competitive threat over time. Bernstein analyst David Vernon wrote that the headlines may have exaggerated the capacity Amazon is adding, calling them “bigger than capacity on offer.”

Industry observers said freight demand is growing, allowing room for multiple providers even as competition increases.