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Supply Chain News: Amazon Continues to Expand Global Logistics Offering with New Air Service for Chinese Vendors

 

Company Says it will Soon Add Air Cargo Service to Get Goods to Its Fulfillment Centers, on Top of Current Ocean Service

March 20, 2017
SCDigest Editorial Staff

Amazon continues to expand its global logistics services to help merchants selling on its site, with plans to add a new air cargo service to its portfolio.

It was just a bit more than a year ago that SCDigest reported on Amazon's plans 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."

Supply Chain Digest Says...

All this in the context that sees the traditional role of freight forwarders in managing cross border shipments under threat from technology generally and Amazon specifically.


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The project's name: Dragon Boat. (See Amazon - The Most Audacious Logistics Plan in History?)

At the time, Bloomberg reported that Amazon intends to bypass brokers and freight forwarders, "amassing inventory from thousands of merchants around the world and then buying space on trucks, planes and ships at reduced rates."

It added that "Merchants will be able to book cargo space on-line or via mobile devices, creating what Amazon described as a 'one click-ship' for seamless international trade and shipping."

Though providing little information on its strategy, Amazon does appear to be moving steadily ahead with project Dragon Boat.

Amazon recently announced plans to build an air cargo hub in the US near the Cincinnati airport, including leasing 40 cargo jets. The company has said that it needs to build out its logistics capabilities to ensure the ability to deliver its huge volumes in peak periods, but it would seem unlikely Amazon would be spending billions of dollars on the hub and aircraft to have it sit idle except for a few peak periods each year.

In recent months, Amazon began handling ocean container shipping to its us fulfillment centers from Chinese merchants selling on its site, taking on a role it had previously left to global freight-transportation companies.

Now, Amazon says it will soon offer an air cargo service as well.

Amazon's logistics services vary by country, a spokeswoman from Amazon said, noting that "In China, we offer Amazon Logistics+ to provide operational support to companies of all sizes."

The Amazon Logistics site says it offers end-to-end one-stop ocean freight services, and that it is currently developing an air cargo service, with plans to quickly introduce it to a large number of sellers.

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Amazon says it can do freight pickups, warehousing, line-haul transportation, and delivery, as well as handle import and export services, according to its logistics site. Primary delivery destinations include the US, Europe and Japan.

"Our solution provides a world-class service offering," Amazon says on the site. "As part of one of the world's leading ecommerce companies, our operations team has strong experience in providing professional logistics solutions. With our own strong logistics volume, we can reduce your operational costs."

All this in the context that sees the traditional role of freight forwarders in managing cross border shipments under threat from technology generally and Amazon specifically. (See Is Technology Likely To Roil Traditional Global Freight Forwarder Providers?)

The Wall Street Journal notes that "Many traditional freight forwarders still conduct their business via phone, email or even fax machine, but Amazon's entrance into the sector could drive shippers away from that method in favor of a user-friendly technology platform."

Amazon's entry into the market is "a huge wake-up call to an industry that's been very slow to adopt technology," said Ryan Petersen, chief executive of Flexport Inc., a San Francisco-based startup based on technology to automate freight forwarding services.

Of course, many believe Amazon's goal is to ultimately offer direct parcel delivery services in competition of UPS, FedEx, and the USPS, though Amazon continues to deny such plans.


What are your thoughts on Amazon's expanding logistics services? Is traditonal freight forwarding in trouble? Let us know your thoughts at the Feedback section below.

 

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