Could Amazon’s Logistics Services Be the Future of the Logistics Industry?
According to an article written by Zvi Schreiber, Amazon’s logistics services could be the future of the logistics industry. The future deployment of Amazon’s technological innovation could disrupt existing freight leaders like UPS, FedEx, and DHL.
Beijing Century Joyo Courier Services, which is known to be Amazon’s subsidiary, has recently registered with the U.S. government as an ocean shipping provider. This development showed that Amazon had already expanded its logistics presence, not just with air transportation and trucking. Amazon’s entry into the freight industry will have a huge impact on international sellers, importers and end consumers.
Last 2014, Amazon focused on logistics components that were previously outsourced to expand its supply chain – first inbound logistics and then home delivery. The company offered outsourced consolidation for international sellers, which leveraged bulk discounts for less expensive United States import rates.
Last December 2015, for the company to decrease its operating costs and not depend on external providers, Amazon packages were delivered by their own employees, while launching a crowdsourced delivery service. Recently, Amazon has revealed features and developments of its drone-delivery program.
According to the article, “Amazon‘s international revenue growth has stagnated, falling to a 12 percent growth in 2014 – modest in Amazon terms.” Could Amazon’s investment into Services help it get back on the growth curve?
What Amazon is continuously doing is extending its internal services into third-party services to reduce fulfillment and logistics costs. Could existing freight leaders keep pace with Amazon’s technological innovation? If history repeats itself, we can predict that whatever comes of this investment will be big and have a significant industry impact.
We’ll have to see.
To find out more about the implications of Amazon’s entry into the freight industry, read the original article: