E-commerce Amazon remains largely unaffected by the global supply chain crisis as it is increasingly taking control of the entire supply chain, City A.M.
Builds its own containers and hiring planes
The company is building its own containers, and has “quietly” been hiring long-haul planes as well as private cargo ships, according to a CNBC report this weekend.
Its 53-foot containers are manufactured in China, thereby avoiding the global short supply, which has led to prices surging to about $20,000 per container, compared to $2,000 before the pandemic.
As it controls its own container ships, Amazon keeps maximum control over routes, designated ports and offloading times. In fact, it is zooming in on smaller harbours to avoid port congestion and long delays, as ocean freight analyst Steve Ferreira explained to the US network.
Large investments
Unsurprisingly, these efforts have required large investments. The e-commerce company reportedly spent more than $61m on shipping costs last year, a significant jump compared to the $38bn it coughed up in 2019.
As a result, Amazon is currently able to ship around three in four of its own packages, compared to just 47 per cent in 2019, according to data from SJ Consulting Group that CNBC cited in its report.
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Source: City A.M
