Speculation that Amazon plans to create as global shipping and logistics operation has gone into overdrive. Amazon have described themselves as transportation service providers within an annual report and identified logistics firms as competitors.
A report by Bloomberg claims they are building a global fulfilment network to expand the existing Amazon Logistics delivery business. The Dragon Boat project aims to position Amazon at the centre of the logistics industry, enabling them to create a one-click system for seamless international trade and shipping.
Amazon’s entry into the freight industry may have a huge impact on its international sellers, importers and customers. But taking into account Amazon’s previous strategies, it could signal massive change for the trillion-dollar freight industry.
Amazon’s development process identifies inefficiencies, develops a technological solution, scales the solution into a platform and offers the platform as a novel solution for third-party businesses.
The global freight industry is manual, inefficient and ripe for technology-driven disruption, making it a target for Amazon’s approach or utilising technology and scale to reduce costs.
Amazon have already announced that Ireland is part of its European expansion plans. It has not been confirmed how many of the new roles will be based in Ireland. Questions remain about the possible implications for pallet racking in Ireland and the opportunities for companies such as https://www.rackzone.ie/.
Existing Logistic Suppliers
Amazon have dismissed the notion of replacing their logistic suppliers, with Brian Olsavsky, the Chief Financial Officer, explaining that any additions are to supplement their existing partners and not replace them.
However, Amazon has been investing in trucks, drones and freight services and opening warehouses and fulfilment centres. Recent acquisitions include Kiva Systems, which offers a mobile-robotic fulfilment system for inventory distribution centres, and a 25% minority stake in Colis Prive, a French shipping company. Their work on a fleet of drones to realise Amazon Prime Air delivery is well documented, and there are rumours of their leasing Boeing 767 freighters for air delivery.
With Amazon’s history of learning from the partners they work with and then absorbing their business, many of their current logistics partners must be very nervous. Unless they can keep up with the pace of technological innovation that Amazon are likely to bring to the industry, existing freight leaders also have cause for concern.