Land and sea will no longer be the only shipping options for Amazon’s sellers, including Chinese customers.
This new initiative is part of Amazon’s business expansion in the global fright and third-party logistics sectors. Having an air cargo service could give Amazon an edge over other top shipping companies, including DHL and UPS. This comes after Amazon edged in on these freight forwarders by managing deliveries from China via ship.
“In China, we offer Amazon Logistics+ to provide operational support to companies of all sizes,” an Amazon spokeswoman said.
The website indicates that Amazon intends to eventually deliver cargo and packages for other companies and its own operations. In February, Amazon also announced its plans to develop a 900-acre delivery air hub in Hebron, Kentucky. The $1.49 billion project will support its Prime Air cargo planes and serve as a proximity point for DHL operations. Amazon also said it will add 40 more Boeing 767-300 cargo planes in between 2016 and 2017. With the air cargo initiatives, Amazon would be able to keep up with consumer demand in upcoming years, as the e-commerce market continues to grow.
For Chinese customers, it is unclear if Amazon will be flying its own plans or booking airspace through other carriers.
Amazon Logistics+ currently offers end-to-end one-stop ocean freight services for Chinese customers. Other perks include pick-up, warehousing, delivery, line haul transportation, import/export (if needed), customer service assistance and individualized integrated solutions. Primary delivery destinations include Europe, Japan and North America. In regards to end-to-end air cargo service, the site says, “we currently are developing this service, and plan to quickly introduce it to a large number of our sellers.”
Considering many freight forwarders still handle business via fax machine, phone or email, Amazon’s dabble in the sector could cause other shipping companies to pursue a more technological path.
Traditional freight forwarders are already taking note. Flexport Inc. chief executive Ryan Petersen said that Amazon could be a game changer for the shipping sector and that his shipping company is currently competing with Amazon’s advanced service.
“You can’t just put your head down in the sand and pretend that change is not going to come,” Petersen said.