This is the $21 billion reason Amazon wants to build its own UPS

Amazon will roll out “Shipping with Amazon” in Los Angeles in the coming weeks

A report that Amazon.com Inc. is planning to launch its own shipping service should be no surprise to anyone who took a close look at the e-commerce giant’s latest regulatory filing.

In its 10-K for 2017 filed with the Securities and Exchange Commission earlier this month, Amazon outlined the multibillion-dollar cost of making good on its free shipping offers.

“Shipping costs, which include sortation and delivery center and transportation costs, were $11.5 billion, $16.2 billion, and $21.7 billion in 2015, 2016, and 2017,” the filing said. “We expect our cost of shipping to continue to increase to the extent our customers accept and use our shipping offers at an increasing rate, we reduce shipping rates, we use more expensive shipping methods, and we offer additional services.

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