The Home Depot is mulling the acquisition of logistics and trucking firm XPO, which provides services for several large retailers, Recode reports, citing unnamed sources.
Amazon and Home Depot are among the company's clients, and Recode suggests that a major reason for the possible acquisition is to keep the $9 billion, public company out of Amazon's hands. Amazon has also considered buying XPO, according to the report.
Spokespeople from Home Depot and Amazon each declined to comment to Retail Dive on the rumor, and XPO didn't immediately return Retail Dive's request for comment.
Last mile logistics have gained in importance as e-commerce has grown, although XPO's position in the market has long been in demand for heavy items like furniture. Such goods are also increasingly being bought online, though shoppers almost always have furniture delivered, even when they've purchased it in stores.
Home Depot isn't the only retailer contemplating ownership of such logistics firms. Walmart has long owned its own trucking services and Target recently acquired Grand Junction, a tech firm that coordinates deliveries via local delivery companies. Amazon also increasingly owns or runs its own logistics, through a fleet of trailer trucks and leases of cargo planes.
Despite those investments, Amazon's shipping and fulfillment costs continue to weigh it down, with those expenses growing faster than its revenue. That may just be spurring the e-commerce giant and rivals to move to control more links in their supply chain. "All in, we believe it is likely Amazon will make a concerted effort to take over ever larger portions of its supply chain," RBC Capital Markets analyst Mark Mahoney said in a report earlier this year. "However, a full-blown Amazon parcel delivery operation would likely take years to complete, so we believe [FedEx] and UPS would have time to react."
Still, experts have told Retail Dive that Amazon's shipping services could indeed rise, much like its cloud services have, to serve third parties. While Amazon built its Amazon Web Services unit to serve its own needs at first, it developed the platform with the idea of providing services to outside parties. Entities from Netflix and the U.S. Central Intelligence Service now employ Amazon's web services.
"They've built this enormous platform that enables them to service customers with this logistics network — inventories they own, inventories they hold and inventories they direct," Mark Cohen, professor of retail studies at Columbia University, told Retail Dive last year. "[A]t the end of the day, there's a lot more to Amazon than just this tremendous array of merchandise."