2017.10.0523:54:00UTC+00Amazon’s Reported Delivery Service Test Spooks Potential Rivals

Shares of delivery companies as declining as investors were alarmed by a report by Bloomberg that Amazon is testing a new delivery program.

Shares of UPS declined by more than 0.7 percent. Meanwhile, FedEx fell by as much as 1.6 percent before closing 0.1 percent up.

The e-retailer's reported test of the delivery program called “Seller Flex” has spooked investors in the delivery industry, believing Amazon's entry into the industry will cause a significant disruption. Under the program, Amazon will pick-up packages from third-party sellers that are selling on its platform and deliver the products to customers.

Amazon said that it will continue to deliver packages using its current delivery partners, but did not clarify whether it will bolster its own deliveries directly to customers. In a statement, Amazon said that they will be using the same partners to offer the program that the are currently using, which involves UPS, USPS and FedEx.

Baird analyst Colin Sebastian said that given the investments Amazon is making for its fulfillment infrastructure and transportation to support its retail business, he believes that a push by Amazon into the delivery business is inevitable.