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Supply Chain News: Lots of Major Amazon News this Week



Amazon May Incur $4 Billion in Extra Logistics in Q4, Wiping Out Profits

Nov. 30, 2021
SCDigest Editorial Staff

Amazon dominates the press coverage in most weeks, but that was exceptionally so in the past few days, with a number of interesting reports.

Alabama Fulfilment Center to Redo Union Vote

It was big news this past March when some 3000 workers at an Amazon fulfillment center in Bessemer, Alabama voted not to join the Retail, Wholesale and Department Store Union by a 71% to 29% margin, according the National Labor Relations Board (NLRB).


Supply Chain Digest Says...


Amazon is also said to be orchestrating international air cargo shipping as well – as its logistics domination is fueling its ecommerce domination.

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If workers there had voted to organize, it would have been the first Amazon facility in the US to form a union, and many expected success in Bessemer to lead to a wave of organizing effort at other sites.

But it wasn’t to be. Except….

The union had made motion to void the vote, alleging Amazon broke a number of labor laws in its fight against the union. Those alleged violations included installing a mailbox on site at the facility, which the union said created the false appearance that Amazon was conducting the election and intimidated workers into voting against the union

A few months back, a NRLB official recommended to a regional NLRB director that a new election be held.

Then nothing for a while, until Monday, when the union announced the NLRB director formally ordered a new union election.

NLRB spokesperson Kayla Blado confirmed the agency has ordered a new election, but didn’t specify when the new union election will take place.

Amazon spokesperson Kelly Nantel told CNBC in a statement that the company disagrees with the NLRB’s decision Monday and that Amazon doesn’t think unions are the best answer for its employees.

Amazon Poised to pass UPS and FedEx Soon, Exec Says

Dave Clark, CEO of Amazon’s worldwide consumer business, said Monday that the company is likely to become the largest US package delivery service by as early as the end of this year.

“I think we’ll probably be the largest package delivery carrier in the US by the time we get to the end of the year, if not in early ’22,” Clark said in an interview with CNBC.

(See More Below)




Amazon now directs thousands of independent last-mile delivery companies (e.g., Amazon Flex, Amazongn Delivery Service Partners) that deliver packages exclusively for Amazon. Amazon has also been rapidly expanding its network of planes, trucks and ships, looking, it appears to be able to move packages from China and other overseas suppliers all the way to the consumer’s front door.

Amazon Takes Steps to Solve Supply Chain Problems

There was additional news this week on Amazon’s massive effort to minimize supply chain disruptions and minimize out of stocks for its customers.

For example, Amazon recently brokered space on a cargo ship heading to the small port at Everett, Washington, carrying industrial goods – and 181 Amazon shipping containers. Most were full of various consumer goods – but some were empties, later used to transfer inventory across various fulfillment centers.

The move obviously let Amazon avoid the huge backups at the ports of Los Angeles and Long Beach. Amazon is also utilizing other less congested ports, such as Houston.

With labor supply also a key issue, Amazon has gone aggressive, hoping to attract the 150,000 workers it says it needs this holiday season by raising pay to sometimes more than $18 per hour and offering signing bonuses of up to $3000 for workers who stay through the of the season.

Amazon is also said to be sending trucks that are only half full to get goods to FCs, despite the high extra costs.

Transport Topics magazine says all this and more is expected to cost $4 billion, which could eliminate all of Amazon’s Q4 profit.

“If the company succeeds in meeting its promises to customers this year, that will be thanks to Amazon-chartered ships taking products from factories in Asia, Amazon Air cargo jets crisscrossing the US, Amazon-branded vans departing from hundreds of local delivery depots and the hundreds of thousands of employees and contractors at each step along the way,” Transport Topics added.z

Many manufacturers and brand companies are taking notice, not only of Amazon’s ability to get goods to the US more dependably that working the working through normal channels – it also often saves them money too. One company says Amazon charged $4,000 to ship a container from China to the US, versus about $12,000 offered by other freight forwarders.

Amazon is also said to be orchestrating international air cargo shipping as well – as its logistics domination is fueling its ecommerce domination.

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