Amazon opens logistics network to outside businesses, raising stakes for Target

Amazon has turned the logistics system it built for its own business into a product for everyone else. With Amazon Supply Chain Services, launched May 4 after an earlier blog post on May 3, the company said outside businesses can tap freight, distribution, fulfillment, parcel shipping, inbound shipping from China, customs clearance and bulk storage through the same network that powers Amazon.

The scale is the point. Amazon says the network runs through more than 200 U.S. fulfillment centers, 80,000 trailers, 24,000 intermodal containers and more than 100 aircraft. Procter & Gamble, 3M, Lands’ End and American Eagle Outfitters were among the first companies to sign up, which makes clear this is not just another marketplace tool. It is Amazon moving deeper into the infrastructure of retail itself.

Peter Larsen, vice president of Amazon Supply Chain Services, compared the launch to the early days of Amazon Web Services, the internal system Amazon later sold to other companies. That comparison matters because it shows the playbook: build a massive operation for Amazon’s own retail engine, then package the same capability for the rest of the market. Reuters and MarketWatch reported that shares of UPS, FedEx, GXO Logistics and C.H. Robinson fell after the announcement, a sign that investors immediately read the move as a competitive threat.

For Target, the pressure lands on the front line. Target’s 2025 annual report says its stores fulfill the majority of digitally originated sales, a model the company says helps improve product availability, shorten fulfillment times and cut shipping costs. That makes the store floor part of the supply chain, whether the work is staging a Drive Up order, pulling items for Order Pickup or clearing a Same-Day Delivery order before the clock runs out.

Target has already tied a lot of its service promise to that system. Every Target offers Order Pickup, and the company’s same-day fulfillment mix includes Order Pickup, Drive Up and Same-Day Delivery. Target also said it is planning more than $2 billion in incremental investments across the business, including more than $1 billion in capital spending and another $1 billion in operating investments, with reliability and availability part of the goal.

The competitive message is hard to miss. Amazon is not only trying to beat retailers on speed and convenience, it is trying to sell the machinery that makes those promises possible. For Target team members, that means the work behind the counter, in the backroom and on the dock is becoming even more central to how guests judge the brand.