I used to work for a company that did logistic software, and Amazon creating their own last-mile service was something they predicted years ago.
It's a nightmare for them because it will ultimately take business away from every carrier, and more sellers will ultimately want to use Amazon's service over time. The margins in shipping are already razor-thin, and Amazon would easily be able to take the loss to choke other competitors out.
Can you post a source about the carriers margins being paper thin because looking at the last annual reports for FedEx and UPS, it doesn't seem to be the case. The biggest expense for them is labor and I think Amazon is going to do a good job of controlling that cost. Goodbye Teamsters.
Sorry, guess I should of been more specific. Margin is thin per package, because shipping is a volume game. Sending a package is actually pretty cheap for most businesses, but unless you have volume, you have no leverage to get a reduced rate.
It's a nightmare for them because it will ultimately take business away from every carrier, and more sellers will ultimately want to use Amazon's service over time. The margins in shipping are already razor-thin, and Amazon would easily be able to take the loss to choke other competitors out.