06 Mar Amazon’s New Move into the Logistics Market
Amazon is one of the world’s largest online retailers and has been a household name for decades. While we, as consumers, generally just think about Amazon for ordering any kind of item, whether it be in regular quantity or even in bulk, its logistics plan is getting quite the facelift.
Amazon is beginning to make the move to use their own shipping methods rather than relying on key logistics companies, putting them in direct competition with logistics companies such as FedEx and UPS.
Why it Matters:
By making this move into the logistics world, Amazon is able to acquire margin shared with shipping partners, therefore increasing Amazon’s profitability. This means that Amazon is just proving further that it is a critical supply chain partner.
What it Means for Consumers:
With Amazon becoming their own logistics provider, consumers and businesses will benefit from lower costs since there will no longer be monopoly prices. Amazon is also looking to offer more customizable delivery options, such as one-hour delivery, which has already begun in some major cities. This change also means that packages are less likely to be lost in the shuffle of distribution.
Amazon creating their own logistics methods doesn’t completely erase the need for logistics companies, however. Companies like FedEx and UPS will still be delivering Amazon packages in rural areas, as well as during peak purchase times like the Christmas season. But with such a rapidly evolving market like logistics, in the next few years, we may all be getting our Amazon packages straight from the source.