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Amazon moves into ocean shipping, expands logistics reach
18 Jan '16
2 min read
E-commerce giant Amazon.com Inc's China arm has registered as an ocean freight forwarder, according to the US Federal Maritime Commission, a move that will give it more control over shipping products from Chinese factories to American shoppers.
The registration is the latest indication that Amazon plans to expand its logistics reach to cut costs for its retail business and potentially provide third-party logistics services to other industries, according to an agency report.
Its new status as a freight forwarder, or "non-vessel operating common carrier," gives Amazon, the world's largest online retailer, a foothold in the $350 billion a year ocean freight business. It will not operate ships but subcontract that work.
Amazon is already negotiating a deal to lease 20 jets to start an air-delivery service in the US, the Seattle Times reported last year. The retailer bought truck trailers to add shipping capacity and started a programme last year that uses a fleet of on-demand drivers to deliver packages.
"It has more and more control over the supply chain of their business and it gives them the ability to squeeze (costs) even further," said Satish Jindel, a logistics consultant and president of SJ Consulting Group.
He added the move gives Amazon an even bigger edge against traditional US retailers in negotiating lower prices for goods.
The Federal Maritime Commission, a US government agency that regulates the US-international ocean transportation system, said last week a business named Beijing Century Joyo Courier Service Co Ltd, with the trade names Amazon China, Amazon.CN and Amazon Global Logistics China, was registered in its database to provide ocean freight services.
Amazon declined to comment on the developments. (SH)
The registration is the latest indication that Amazon plans to expand its logistics reach to cut costs for its retail business and potentially provide third-party logistics services to other industries, according to an agency report.
Its new status as a freight forwarder, or "non-vessel operating common carrier," gives Amazon, the world's largest online retailer, a foothold in the $350 billion a year ocean freight business. It will not operate ships but subcontract that work.
Amazon is already negotiating a deal to lease 20 jets to start an air-delivery service in the US, the Seattle Times reported last year. The retailer bought truck trailers to add shipping capacity and started a programme last year that uses a fleet of on-demand drivers to deliver packages.
"It has more and more control over the supply chain of their business and it gives them the ability to squeeze (costs) even further," said Satish Jindel, a logistics consultant and president of SJ Consulting Group.
He added the move gives Amazon an even bigger edge against traditional US retailers in negotiating lower prices for goods.
The Federal Maritime Commission, a US government agency that regulates the US-international ocean transportation system, said last week a business named Beijing Century Joyo Courier Service Co Ltd, with the trade names Amazon China, Amazon.CN and Amazon Global Logistics China, was registered in its database to provide ocean freight services.
Amazon declined to comment on the developments. (SH)
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