There was a notable change in Amazon.com's (NASDAQ: AMZN) annual report this year. Under the competition section of its 10-K, Amazon listed "companies that provide fulfillment and logistics services."

Previously, Amazon had always considered FedEx (NYSE: FDX) and UPS (NYSE: UPS) partners. But the company is moving more and more of its shipping needs in-house. On the fourth-quarter earnings call, CFO Brian Olsavsky said the online retailer can ship many packages itself for less than it'd have to pay a third party.

Since the start of the year, Amazon has been making investments in potential solutions for last-mile delivery, as well as expanding its Prime Air network, buying more planes and developing its airport hubs. Here's what it's been up to and why its moves should scare FedEx and UPS.

Image source: Amazon.

Automating the last mile

The biggest bottleneck in any logistics operation delivering packages from a fulfillment center to a customer's doorstep can be the last mile. This can often be the most costly part of a delivery. Amazon, FedEx, and UPS often fall back on the U.S. Postal Service to deliver packages where their own networks fall short but the government mandate ensures packages get delivered.

Amazon has made several investments in last-mile delivery recently.

1. It started testing Scout, a robot about the size of a cooler, to deliver packages autonomously in a suburb north of Seattle.

2. It participated in a venture capital round to fund Aurora Innovation, an autonomous-vehicle company.

3. It's also in talks to invest in Rivian, an electric-vehicle company.

Each is an opportunity to reduce the cost of sending trucks operated by a human to run delivery routes all over thousands of cities. An autonomous electric truck unleashing dozens of little robots throughout neighborhoods could deliver packages more quickly and less expensively over the long run.

Such a delivery scheme is still just a twinkle in the eye of Jeff Bezos. But Amazon is also investing in more practical delivery infrastructure in the here and now.

Amazon Air is expanding

At the end of December, Amazon signed leases on 10 new planes to bring its total Amazon Air fleet up to 50. It also announced plans to open its Air Hub in northern Kentucky in 2021 where it will be able to house up to 100 planes and handle 200 takeoffs and landings per day.

Amazon Air made about 350 flights per week among 27 active cargo planes in the second quarter last year. The new hub in Kentucky will enable it to grow quickly and take full advantage of its entire fleet.