Amazon, Walmart, Target: Why the Future of Parcel Delivery Is Retail-Owned

The parcel delivery game is changing fast. For years, brands depended on the Big 3 (UPS, FedEx, and USPS) to get packages from A to B. But now, retailers are stepping in as a new kind of delivery powerhouse

Amazon, Walmart, and Target are building and scaling their own logistics networks, and they’re doing it fast. Amazon already delivers more packages in the U.S. than UPS. Walmart’s Spark Driver and Target’s Shipt are moving deeper into neighborhoods across the country. These companies are turning delivery into a core part of their retail strategy.

For DTC brands and eCommerce retailers, this shift is big. It changes who you’re competing with, who you might want to partner with, and how you think about your small parcel shipping strategy. In this article, we’ll break down what’s happening, why it matters, and how your brand can stay ahead.

The shift: Retailers as logistics powerhouses

Amazon, Walmart, and Target aren’t just optimizing delivery for their own products; they’re becoming serious players in the broader parcel delivery market.

Amazon Logistics is a carrier in its own right. Amazon is actively contracting with third-party shippers and offering commercial delivery rates through fulfillment partners. With thousands of delivery service partners (DSPs), regional sortation centers, and a dense last-mile delivery network, Amazon is now contracting with third-party merchants and offering delivery services beyond its own marketplace. Through programs like Buy with Prime, Amazon is offering logistics as a service, giving brands access to fast shipping and high conversion rates on and off Amazon. This positions Amazon as both a retail competitor and a logistics provider, putting pressure on DTC brands to either compete or collaborate.

Walmart has turned over 4,000 of its stores into micro-fulfillment hubs, powering same-day and next-day delivery through its own infrastructure. What makes Walmart’s approach unique is the combination of inventory, infrastructure, and tech. Unlike pure-play carriers, Walmart controls the product, the location, and the delivery. This vertical integration lets them compete on speed and cost, particularly in underserved or suburban markets.

Meanwhile, Target, through acquisitions like Shipt and Deliv, is quietly building a last-mile operation that rivals national carriers in key metros. Today, Target leverages these tools to enable same-day delivery from more than 1,500 stores, often bypassing traditional carriers entirely.

Retailer benefits of owning logistics

There’s one key motivator for all of those retailers to venture into shipping: control.

Owning the logistics chain means:

• Faster delivery
• Lower fulfillment costs
• Full visibility from cart to doorstep
• Fewer dependencies on volatile carrier networks

By bypassing traditional carriers, these retail giants improve their customer experience while keeping operational costs in check.

Traditional carriers are losing ground

As these retail-owned networks grow, the Big 3 are losing share.

• USPS continues to struggle with service and cost restructuring.
• FedEx and UPS are optimized for commercial, high-weight shipments, not the lightweight residential deliveries that dominate eCommerce.

Many of the fastest-growing deliveries in the U.S. are now handled by carriers shippers can’t even access without a partner.

What retail-owned parcel delivery means for shippers

The rise of retail logistics has two major implications:

1. “Unattainable” volume: Many parcels shipped by Walmart, Target, and Amazon aren’t moving through the traditional carrier ecosystem at all. This increases capacity and competition in the public shipping market.
2. Reduced leverage: Brands relying on FedEx or UPS may find themselves with fewer options and rising costs, especially for lightweight, high-volume shipments.

Our recommendations for smart brands

Leading eCommerce and DTC brands are:

• Auditing carrier mix for overexposure
• Partnering with 3PLs that offer access to Amazon Logistics and gig carriers
• Using technology to rate shop and route shipments dynamically
• Downloading tools like the Carrier Diversification Readiness Checklist (coming soon) to assess risk

Embracing and preparing for retail-owned parcel delivery

Retailers aren’t just shipping their own products, they’re changing the delivery landscape for everyone else. With programs like Amazon Logistics, the Walmart Delivery Network, and the Target shipping strategy, we can see last-mile delivery solutions shifting toward large retail players. To stay competitive, shippers must think more like retailers: with flexibility, speed, and a network that works in their favor.

Want to restructure your shipping strategy to stay ahead of the game? Chat with us for a free shipping analysis!