Amazon is reportedly testing its own delivery service

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Shares of FedEx and UPS were each trading lower by more than 2 percent early Thursday morning.

Amazon is exploring the concept of a new delivery system dubbed "project Seller Flex", in which the e-commerce giant will assume a bigger role in functions provided by FedEx and UPS, two people familiar with the plan told Bloomberg. The service, a project Amazon is calling Seller Flex, has begun on a trial basis in the West Coast and is expected to have a broader rollout in 2018, the report said.

Last year, Amazon introduced Seller Fulfilled Prime, which lets merchants who don't stow items in Amazon warehouses still have their products listed with the Prime badge, meaning they'll be delivered within two days. The new service gives Amazon control over those deliveries instead, even if it continues to use third-party couriers.

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In the past, both FedEx and UPS have scoffed at the idea Amazon would eventually become less of a partner and more of a competitor. In some cases, it will also handle delivery to customers, eliminating the major delivery partners of UPS and FedEx.

As Bloomberg notes, this is yet another move by Amazon to own more of its own logistics process, and it could help the company optimize its inventory management process by providing more insight into parts of its supply chain that were previously opaque since they were beyond its direct control. The company issued refunds to many shoppers and may have signaled that it is too dependent on shipping partners during its busiest times. Taking over some responsibility for delivery enables Amazon to protect that edge as rivals like Wal-Mart Stores Inc. enhance their own delivery operations. But the popularity of this service strains Amazon's capacity during the end-of-year holidays.

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