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Supply Chain News: Walmart Denies Telling Carriers It doesn't Want Them Hauling Freight for Amazon

 

Report Comes Just One Week after Reports Its Tech Vendors Can't Use Amazon Web Services

July 6, 2017
SCDigest Editorial Staff

Satish Jindel, president of SJ Consulting Group and ShipMatrix, caused quite a stir in late June when h told attendees at the SMC3 conference in Palm Beach that Walmart is sending veiled messages to trucking companies that carry its freight that if they do business Amazon too, it may not want to work with them anymore.

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Walmart also sent an email to Heavy Duty Trucking magazine that "This report is false."


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The comments were picked upped by a variety of media, from logistics sites to investor-oriented ones.

Walmart has strongly denied it is using such tactics.

Describing the battle royal between Walmart and Amazon as a retail "cold war" at the conference, Jindel later told the New York Post that "I know that Walmart has expressed its views to truckload carriers."

"Walmart would prefer to do business with carriers that are not doing business with Amazon," in part due to concerns abbout their ability to handle high volumes of deliveries during peak times, Jindel says.

Jindel added that Walmart began having these conversations with carriers over the past 30 days or so, and that he has talked directly with some of those carriers.

"These developments, if true, are likely to have significant implications for US transportation companies as Amazon and Walmart remain two of the largest users of truckload capacity," wrote Deusche Bank industry analyst Amit Mehrotra in a research note based on the news.

However, a Walmart spokesman denied that the company has had discussions with trucking companies about high-peak delivery times or about Amazon, adding that "it would be illegal for us to tell them who they can do business with."

Walmart also sent an email to Heavy Duty Trucking magazine that "This report is false."

This just a week after the Wall Street Journal reported that Walmart was also telling its technology vendors that they cannot run any of their software on Amazon's popular AWS Cloud platform.


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Part of that demand may be related to just not wanting to even indirectly generate revenues for Amazon, but Walmart spokesman Dan Toporek added that "It shouldn't be a big surprise that there are cases in which we'd prefer our most sensitive data isn't sitting on a competitor's platform."

The Wall Street Journal also reported that other large retailers also have requested that service providers move away from AWS, according to technology vendors that work with retailers.

This Cloud services battle takes aim at the financial advantage AWS gives Amazon. The company's global retail business has famously struggled with delivering any profits, but overall results are boosted by the enormous profits AWS generates. In the first quarter, AWS posted $890 million in operating income, accounting for 89% of Amazon's overall operating income, even as AWS's $3.66 billion in net sales accounted for just 10% of the company's total.

Software firm Lofty Labs worked with a retail-analytics consulting company to build cloud-based forecasting tools for Walmart. To win the business, Lofty Labs had to develop the application for Microsoft's Azure Cloud platform.

"That was a deal breaker," Lofty Labs President Casey Kinsey told the Journal. The service is the only one Lofty Labs ever developed to work on Azure. "Everybody knows that Walmart will not play ball with you if you use AWS."


Have you heard of Amazon telling carriers that they can't haul for Amazon too? What do you think of this, if accurate? Let us know your thoughts at the Feedback section below.

 

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