Amazon is launching a package-delivery service to compete with FedEx and UPS

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A worker inside an Amazon warehouse.

• Amazon will launch a package-delivery service called "Shipping with Amazon," or SWA, according to a report from the Wall Street Journal.
• The service will compete directly with UPS and FedEx.
• SWA will roll out in Los Angeles over the next few weeks and then spread to other cities in the US over the course of the year.

Amazon is planning to debut a package-delivery service for businesses that will compete directly with FedEx and UPS according to a new report.

The Wall Street Journal's Laura Stevens reported Friday the ecommerce giant will roll out the service, called Shipping with Amazon, or SWA, in Los Angeles over the next few weeks. The service will then spread to other cities around the US over the course of the year.

The company would send SWA drivers directly to retailers and warehouses to pick up parcels and then deliver them to their destination, cutting out other delivery services. The plan is to start with third-party Amazon vendors, said the report, and undercut the costs of the other delivery giants.

The move further expands Amazon's recent push into logistics and delivery, following the company's leasing of aircraft and ocean freight equipment.

In response to the news, UPS' stock declined around 5% in pre-market trading while FedEx's stock fell by roughly 4.3%.

This story is developing...

Read the full report on the Wall Street Journal»