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Category: Global Supply Chain

Global Supply Chain News: Amazon Making Its Own Ocean Containers, Chartering Ships, Using Smaller Ports


Mighty Amazon Logistics Rolls On, Taking more and more Control



Dec. 7, 2021
SCDigest Editorial Staff

It’s no secret Amazon want to take direct control of its logistics operations, both for cost and service concerns.

Supply Chain Digest Says...


Amazon is also working with the ship owners to modify bulk cargo ships built to move commodities such as lumber or agricultural products to handle containers cargo instead.


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And more news along those lines again this week, after reports last week that an Amazon-chartered cargo ship called on the small port in Everett, Washington to avoid the huge delays to get a berth at the sister ports of Los Angeles and Long Beach. It has also been using the larger but still relatively small port of Houston as well.

Now, CNBC reports this week that for several years Amazon has contracted with a Chinese manufacturer to produce its own shipping containers, reducing its reliance on containers provided by shipping lines, which have been in extremely short supply, causing prices for the boxes to soar.

“Amazon has produced probably 5,000 to 10,000 of these containers over the last two years I’ve been tracking it,” ocean freight analyst Steve Ferreira recently told CNBC. “When they bring these containers onto U.S. soil, once they unload them, guess what? They get to be used in the domestic system and the rail system. They don’t have to return them to Asia like everyone else does.

By creating its own containers, Amazon ensures the equipment is going to be available for the company.

Amazon is not the only major retailer chartering its own container ships in the face of all the global shipping chaos, with Target, Walmart, Costco, Home Depot and others doing the same.

But Amazon has taken it to a whole new levels. In 2017, an Amazon subsidiary received approval to operate as a freight forwarder in China. Now, it is moving some 10,000 containers per month, filled with goods from small- and medium-sized Chinese exporters. Internally, Amazon calls this project “Dragon Boat.”

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Amazon is also working with the ship owners to modify bulk cargo ships built to move commodities such as lumber or agricultural products to handle containers cargo instead.

Bloomberg also recently reported that for some very high-margin products, Amazon is avoiding ports altogether by leasing at least 10 long-haul planes to move from China to the US. One of the converted Boeing 777 planes can carry 220,000 pounds of cargo. While that’s just a fraction of what a large container ship can hold, the strategy ensures some high profit goods are stocked at its Fulfillment Centers when customers go to place an order.

As a final data point, SJ Consulting Group estimates that Amazon is now shipping 72% of its own packages, up from less than 47% in 2019, as mighty Amazon Logistic rolls on.

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