Logistics must occur at lightning speed. That’s why Amazon has constructed a delivery service that grants it increased ownership over its supply chain operations, greater flexibility getting packages to customers and power over other shipping giants in the field. This should come as no surprise from the e-commerce giant that acquired a high-end grocery chain for $13.7 billion, forfeited $7.2 billion to offer free shipping, and can drop $1.5 billion to build a hub for its cargo planes. Amazon has the capacity to take over entire industries and these delivery speculations have been circulating for quite some time. What industry won’t Amazon disrupt?
Amazon sets its sights on delivery service
The Wall Street Journal reported Friday that the e-commerce giant will launch a delivery service of its own. This strategic move potentially positions Amazon to directly compete with FedEx and United Parcel Service Inc (UPS). Delivery domination won’t occur overnight and would take years to truly compete in the same arena as FedEx, UPS and DHL.
According to sources, the new service, named Shipping with Amazon (SWA), will provide third-party sellers with a different delivery option. An Amazon truck will come to their warehouse, pick up pallets of packages and transport them to an Amazon fulfillment center. Right now they have to ship them to Amazon centers themselves. It’s reported that Amazon could pick up packages from businesses and ship them to consumers eventually.
Amazon deploys delivery fleet
Amazon continuously looks to operate at razor-thin margins. Being able to control the logistics chain will give Amazon critical data and negotiation power. If Amazon deploys its own delivery fleet, it can better oversee brick and mortar locations, have the upper-hand when it comes to shipping items with UPS or FedEx and, of course, contend with other retailers on faster delivery timelines.
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