Amazon logistics push rattles Delhivery, stock drops over 4%

Delhivery share price slumped over 4% on Tuesday, 5 May, after Amazon unveiled a new bundled logistics offering that could intensify competition in the sector.

According to a Bloomberg report, the e-commerce giant has launched Amazon Supply Chain Services (ASCS), a platform that allows businesses to access its end-to-end logistics network as a single package. The offering brings together services such as air and ocean freight, trucking, warehousing, and last-mile delivery, and is already used by companies such as Procter & Gamble and 3M.

Amazon originally established its logistics infrastructure to support its e-commerce activities, depending on third-party companies for transportation and delivery. However, over the last 10 years, the Seattle-based company has built an extensive in-house network, including a dedicated cargo airline, a sizable fleet of delivery vehicles operated by contract drivers, and freight brokerage services spanning sea, rail, and air.

According to a Bloomberg report, the firm has gradually begun offering these services to external clients and is now consolidating them into a cohesive package. The branding of ASCS resembles that of other Amazon divisions, such as Amazon Web Services and Amazon Health Services, highlighting its goal of expanding logistics as an independent business.

After Amazon's announcement, the stock prices of logistics and parcel delivery companies fell sharply on Wall Street overnight. FedEx fell by 9%, its largest single-day decline in a year, while competitor UPS dropped byover 10%. GXO Logistics experienced an 18% decline, while Forward Air saw a 24% decline.

The development is seen as a potential overhang, given that Delhivery derives a significant portion of its revenue from e-commerce logistics, and Amazon is also a key client. With Amazon now opening up its end-to-end logistics network to third parties, competitive intensity in the sector is likely to rise.

Analysts believe this move could impact volumes and pricing power for third-party logistics players like Delhivery, as large clients may increasingly shift to Amazon’s in-house capabilities.

Delhivery share price today

Delhivery share price today opened at ₹463.05 per share on the BSE, touched an intraday high of ₹465.70 per share, and an intraday low of ₹448per share.

According to Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, the stock is under pressure today, having slipped below its key short-term moving average of the 20-day EMA.

He noted that the stock has been trading in a range over the past month, with the ₹475 level acting as strong resistance on multiple occasions. Unless this level is decisively breached, prices are likely to remain in a consolidation phase.

On the downside, Bhosale highlighted ₹440, aligned with the 200-day moving average, as a crucial support level. A break below this mark could trigger further weakness in the stock.

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