Amazon gets ready for its own cargo container ship operation out of China
It is reported that US Federal Maritime Commission listed Amazon, through its China subsidiary, as a registered freight provider.
The company will provide
- Commercial services to clients, moving tons of cargo from China to the US and
- A direct line from manufacturers to Amazon’s retail operations.
By their own freight shipping operation, Amazon could reduce the cost of shipping cargo overseas by controlling the shipping vessels and linking them up with its warehouse and shipping infrastructure. Amazon uses its own software to automate and streamline the entire process.
Ryan Peterson, CEO of freight forwarding company Flexport, explains:
The registration will allow Amazon to ship freight cargo by boat and would allow the company to provide commercial services to clients, moving tons of cargo from China to the US and providing a direct line from manufacturers to Amazon’s retail operations.
“Chinese suppliers would love direct access to Amazon’s vast American customer base. But the idea of buying ocean freight is far less appealing for US companies selling on the Amazon Marketplace,”
“As the freight forwarder on a company’s shipments, Amazon would see both the name of the supplier and the wholesale price paid by the importer. For most of the more than 40,000 sellers currently earning over $1 million per year selling products on Amazon, this data is too sensitive to entrust with a company that is both a primary distribution channel and a ruthless competitor.” “If we’ve learned anything from Amazon’s strategic playbook over the last two decades, we can expect that it will price freight as close to marginal costs as it can get,”
“With the integration of its worldwide network of fulfillment centers and the combination of its new fleet of cargo jets, Amazon will be able to build a world class logistics platform for small and medium sized Chinese businesses.”
Amazon spokesperson said: “nothing more to share” on the matter.
Source: The Register