How Close Is Amazon To Becoming A Major Player In Providing Logistics Services?
If there was any doubt that Amazon is very serious about becoming a major player in the Logistics Industry, not only as a user of logistics services but more importantly as a major player providing logistics services, a recent article in the Wall Street Journal will help to dismiss those thoughts.
The article states that Amazon has been quietly looking into purchasing or licensing technology to handle their freight management program which is a clear sign that they are in fact very serious about making this happen and we suspect their goal is to dive in sooner rather than later.
For several years now the knock on Amazon was that they were very good at driving new ideas, but that they were not good at improving profits. It is clear that Amazon has let profits take a back seat while they continue to push the envelope to challenge the industry’s status quo. Also for many years, shippers have been eager to see additional parcel carriers enter the marketplace and challenge FedEx, UPS and the USPS. That challenge is right around the corner.
In addition to the transportation management technology, Amazon has entered into agreements to acquire aircraft for the purpose of moving large volumes of freight, they have obtained their license to operate as a non-vessel-owning common carrier, and have been striking at the heart of small package deliveries in major metropolitan areas. All this to show the world that they are serious about becoming a major player in the multi-billion dollar industry of moving products at home and around the world.
Shippers entering into contracts with their current parcel carriers may soon have another entity to negotiate with. Competition is always a good thing and only time will tell if Amazon’s entry into the business as a full-time logistics service provider will help shippers to negotiate lower domestic and international shipping rates.
Original article can be found here:
