The rally peaked early before losing altitude, it was holding up fine until a report that Amazon is rolling out its own end-to-end delivery network to handle its business, but also pick-off customers of FedEx (FDX) and United Parcel (UPS).  The company has been testing Amazon Shipping in London and Los Angeles and may be ready to go live.

If the report from the Wall Street Journal is correct Amazon will target:

• Fuel surcharges fees
• Residential surcharge fees

This speculation has been around for a while and has hit share prices of big names in shipping, but now it could be more than speculation.  If Amazon goes after this industry the way it’s gone after others, it would mean significant hits to profits.

The Dow Jones Transportation Index is taking a big turn lower, even names that posted strong results last week:

• Avis (CAR) (earnings)
• FedEx (FDX)
• United Parcel Service (UPS)
• JB Hunt (JBHT)

Dow Jones Transportation

I have a running ledger of industries and stocks Amazon was going to put out of business, so I’m leery about FedEx and the selloff.  But I would say the industry probably needs disruption.  By the way, Mercedes opened a new Sprinter factory in North Charleston, S.C. to meet the voracious appetite of Amazon, so they are going to be a force in package delivery.