🥛 The scariest Amazon launch yet 😳

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Here’s what we’ve got for you today:

✍️ Amazon just launched its most important product since AWS.
🎙️ The Milk Road AI Show: “Scarcity Will Become Priceless”: The Next AI Investment Thesis.
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AMAZON JUST PULLED THE SAME TRICK TWICE

In 2006, Amazon was just a website where you bought books.

Then one day, Jeff Bezos looked at the server infrastructure they'd built to keep that website running and had a thought.

"What if we just rented this to everyone else?"

That became Amazon Web Services, now a $ 142B-a-year juggernaut and, by a wide margin, the most profitable cloud company on the planet.

Source: Giphy

Andy Jassy looked at the warehouse, freight, and last-mile delivery network Amazon built to ship your shampoo and had the exact same thought.

The result is Amazon Supply Chain Services, ASCS, and it is the most consequential thing Amazon has announced since AWS.

The pitch is almost insultingly simple.

Any business, any size, any industry can now plug into the same logistics network Amazon built to ship 13B items a year.

Ocean freight, air freight, warehousing, fulfillment, last-mile delivery, and customs clearance, all in one end-to-end system, are now accessible to anyone from Procter & Gamble to a sneaker seller on Instagram.

Now, before you shrug and say cool, another Amazon logistics product, let me explain why this is actually kind of terrifying.

Amazon’s hidden delivery empire

In 2025, Amazon delivered 6.7B packages, making it the number one parcel carrier in the United States.

Source: LinkedIn

They passed FedEx, they passed UPS, and they even passed the United States Postal Service, which has been delivering mail since 1775.

They did all of that while only shipping Amazon's own stuff, and ASCS just opened the floodgates to everyone else.

The on-time delivery rate across this network? 96.4%, powered by 200+ fulfillment centers, 80,000+ trailers, 100+ aircraft, and 24,000 intermodal containers.

Source: @amazonnews

DHL took 50 years to build its network, while Amazon built a better one in 10 and then decided to rent it to you.

Here’s what makes Amazon genuinely different from every legacy 3PL (third-party logistics provider) on the market.

Legacy logistics companies like DHL, XPO, and Ryder are fundamentally asset-light businesses stitched together with carrier partnerships and outdated ERP software.

They are logistics specialists focused on optimizing logistics, while Amazon is a retailer that had to build its own logistics network from the ground up and that creates a completely different mindset.

They obsess over what the customer actually receives, not what the manifest says.

They built AI forecasting tools trained on 400M+ SKUs worth of inventory data.

Their routing algorithms know which Tuesday morning in Atlanta has a traffic jam before the traffic jam knows it has a traffic jam.

And unlike every legacy player, they have no long-term contracts.

You pay for what you use which sounds like a small detail until you realize it removes the single biggest reason companies stay stuck with bad logistics providers.

What Amazon actually built

Everyone thinks Amazon's moat is the Prime button in the top right corner of your browser but that's not even close to the whole picture.

Here's what ASCS actually puts on the table for any business willing to plug in:

Cross-border freight from factory to fulfillment center, ocean, air, rail, ground, all under one roof.
AI-powered inventory placement that decides where to store your product before demand spikes, not after.
Multichannel fulfillment that ships from the same inventory pool, whether the order came from Amazon, your website, TikTok Shop, or a wholesale buyer.
7-day-a-week last-mile delivery with photo-on-delivery confirmation.
Real-time end-to-end visibility across every leg of the journey.

Reading that list out loud is about as thrilling as watching someone file a customs form.

Building any one of those from scratch would take a competitor a decade and billions of dollars, and Amazon is offering all of them as a bundle, with no long-term contract, to a business of any size, anywhere.

The Day 1 adopters on the press release are P&G, 3M, Lands' End, and American Eagle Outfitters.

These aren’t scrappy startups that couldn’t afford their own logistics operations, but rather companies with full-scale, in-house supply chain departments.

If they're choosing to plug into Amazon instead of running their own thing, that tells you everything about how compelling the offer actually is.

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AMAZON JUST PULLED THE SAME TRICK TWICE (P2)

Let's talk about the numbers that actually matter.

Amazon just posted Q1 2026 earnings with $181.5B in revenue, up 17%, and a 13.1% operating margin, the highest in company history.

Net income hit $30.3B, surging 77% year over year, and AWS, the cloud business that everyone said was slowing down, grew 28%, its fastest pace in 15 quarters.

Source: @danielisdizzy

The AWS cloud backlog, meaning future revenue that is already contracted and locked in jumped from $244B in Q4 2025 to $364B in Q1 2026.

That is a $120B increase in contracted future revenue in just 90 days.

But they are also spending $200B in 2026 CapEx, which is the kind of number that makes your eyes water until you remember that AWS generates $37.6B in revenue in a single quarter at a 37.7% operating margin.

Earlier this year, when that CapEx number dropped and the stock got hammered, I bought Amazon at its lowest price of the year.

And that position is already up over 30%.

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Anyways, Amazon is not a struggling company gambling on a Hail Mary.

They are a machine printing cash, using that cash to build more infrastructure, and then renting that infrastructure to the world.

ASCS is just that playbook, applied to boxes instead of bytes.

The part that should keep FedEx executives up at night

The global third-party logistics market is already about $1.3–$1.4T and is projected to reach roughly $2.7T by 2035.

Source: Precedence Research

For reference, that’s about three times the size of the entire global cloud computing market when AWS launched in 2006.

AWS's total addressable market back then? Roughly $15B, and today AWS generates $142B a year.

Read that again and think about what a 10x on the logistics market looks like for the company currently holding every possible structural advantage in the space.

The companies with the most to lose are exactly who you'd expect.

UPS and FedEx are the most exposed.

Amazon already surpassed them in parcel volume and ASCS throws open the door to every B2B client and non-Amazon merchant that those carriers currently depend on for revenue.

Shopify built a fulfillment network, and Amazon ASCS makes it irrelevant for any merchant willing to plug in instead.

Flexport, ShipBob, ShipMonk, the startups that raised hundreds of millions to modernize freight, now have to compete against the company that basically defined modern freight.

The only real safe harbor is deep enterprise logistics where Fortune 500 companies have legacy contracts and specific global complexity that Amazon can't yet touch.

But even there, Amazon has a track record of showing up late and then winning anyway.

The honest verdict

Here is what Amazon is actually becoming.

Think of Amazon as the operating system of global commerce.

AWS is Windows Server for the digital economy, the cloud backbone powering two-thirds of the internet.

ASCS is shaping up to be its physical counterpart, moving every product every business sells to every customer on earth.

Add the marketplace ($41.6B in third-party services), the ad platform ($17.2B and growing 24%), the custom silicon, and ASCS, and you have the only company in history that controls every layer of global commerce simultaneously.

If you’re selling on Amazon, running on AWS, advertising through Amazon Ads, and shipping via ASCS, Amazon isn’t just a partner but rather the infrastructure your entire company depends on.

Leaving would mean rebuilding your operations from the ground up, which is so costly and complex that most companies simply won’t.

The bear case is real, low margins to start, eye-watering CapEx, and enterprise logistics relationships that are sticky and take years to break.

And eventually, antitrust regulators are going to notice that one company controls your storefront, your cloud, your ads, and your shipping, but Amazon has played this game before.

They outspent and out-executed the cloud incumbents over a decade.

They outspent and out-executed the parcel carriers over the same timeline.

ASCS is not a new strategy but rather the same strategy, applied to a market three times larger.

Jeff Bezos built warehouses to sell books, then he turned those warehouses into the most important logistics network on earth.

Now, Andy Jassy is renting that network to the companies that used to use FedEx.

The trick worked in the cloud, and it worked in delivery.

And if the data is right, a $1.4T market is about to find out what happens when Amazon runs the same play a third time.

Alright, that's it for this edition of Milk Road AI. We want to hear from you.

Who wins the logistics endgame?

AI INFRASTRUCTURE IS THE TRADE 🚀

In today's episode, we sat down to break down where capital is flowing as the AI build-out reshapes markets, labor, and macro risk.

Here's what you'll hear:

Why AI CapEx is the dominant story, with Morgan Stanley pegging hyperscaler spend at $1.1T by 2027.
How the SaaS selloff is unfolding even on strong earnings, with Palantir as the textbook case of multiple compression.
Why oil above $100, Iran tensions, and data-center pushback could throttle the pace of AI deployment.
Why Kyle is bullish on Tesla robo-taxis as unsupervised fleets scale and unlock new service categories.

Tap in to catch the full breakdown 👇️

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