Amazon.com, Inc. (AMZN) Testing 'Last Mile' Delivery Service; UPS (UPS), FedEx (FDX) on Watch

Amazon.com (Nasdaq: AMZN) is testing out its own last mile delivery service in some parts of the U.S. right now.

According to the WSJ, Amazon's shipping costs have gone up each year since 2009. Just last year, the expense grew 29 percent, clipping potential profits in the process.

The move will also help Amazon to gain more control over it's logistics, particularly during the high-volume holiday shopping season, which comes at the end of each calendar year in the U.S.

While UPS (NYSE: UPS) and FedEx (NYSE: FDX) might not be too worried right now, Amazon could pose as serious competitor and even take business away should its network of delivery vehicles grow. Given that UPS and FedEx have a number of years on Amazon in terms of logistics, many market watchers think it will still be tough for Amazon to meet the efficiency of its peers within a few years.

Peers also testing delivery services include Wal-mart (NYSE: WMT), Google (Nasdaq: GOOG), and eBay (Nasdaq: EBAY).

Amazon is trading positive into its Q1 report, expected out after markets close today.

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