Friday, February 12, 2016

Amazon Delivers:

E-tailer moving into logistics space from every direction, completing world dominance.

Amazon, the company that used to sell books and now sells everything, is poised to enter the shipping industry, and compete head to head with the delivery companies who have previously been its essential partners, getting purchases to the customer’s doorstep.

Despite Amazon’s dismissal of the speculation that the company plans to compete directly with UPS and Fedex, Bloomberg News says it has seen documents that show the online retailer plans to do exactly that.
Bloomberg says Amazon has a plan, which it (chillingly?) calls “Dragon Boat,” that entails expanding the global reach of Fulfillment By Amazon, the unit that oversees storage, packing and shipping for third-party merchants who sell products through Amazon’s site. Dragon Boat will also place Amazon in a position to take on Alibaba, the Chinese e-commerce powerhouse. The companies are increasingly competing against one another internationally.

The 2013 report to Amazon’s senior management team was an outline for “a global delivery network that controls the flow of goods from factories in China and India to customer doorsteps in Atlanta, New York and London,” Bloomberg stated. The internal Amazon document describes Dragon Boat as a “revolutionary system that will automate the entire international supply chain and eliminate much of the legacy waste associated with document handling and freight booking.”

In a 10-K securities filing, Amazon for the first time identified “companies that provide fulfillment and logistics services for themselves or for third parties, whether online or offline” as competition, and it referred to itself as a “transportation service provider.” Amazon’s net shipping costs reached an all-time high, $1.85 billion, during the fourth quarter of 2015 and surpassed $5 billion for the full year. This was a record expense and may be another motivation for the e-commerce giant to build its own shipping and delivering business.

Reports from pilots and other sources have Amazon operating four Boeing 767 cargo aircraft from a little-used freight airport in Ohio, and the company has registered with the Federal Maritime Commission to become a licensed ocean freight forwarder. Their experiments with “last mile” flying drone delivery have been well publicized.

And coming full circle, Amazon, the company that killed the traditional bricks and mortar bookstore, opened its first physical bookstore in Seattle last fall, and a major U.S. mall operator says they will open up to 400 more.

Kirk Shearer
TOTALogistix <>
800-989-0054 x103

No comments: