Friday, January 27, 2017

Shipping: "Amazon Enters Trillion Dollar Ocean Freight Business" (AMZN)

This is a business opportunity that is different from but related to that being addressed in our earlier Shipping: Maersk, Alibaba Team Up To Offer Space On Container Ships.

From Supply Chain 24/7:

Amazon has begun shipping products from Chinese merchant partners to its U.S. warehouses via ocean freighters, this is something it used to outsource exclusively, and another piece of the overall shipping and logistics picture that it’s now controlling directly, at least in part. 
Amazon doesn't want to have to rely on (and pay) third-party delivery companies. It's already taken control of lorries and planes and now it's taking control of ships, The Wall Street Journal reports.
Specifically, the Seattle-headquartered ecommerce giant has started handling the shipment of goods from Chinese retailers that sell on its platform to its vast US warehouses.

Previously it left this to global freight-transportation companies.

Since October, Amazon has helped to ship some 150 containers of goods from China to the US, according to The Wall Street Journal, which cites shipping documents collected at ports of entry.
“Amazon has integrated all those services into one basket,” said Steve Ferreira, chief executive of Ocean Audit, in the report.

He noted that, for Amazon, creating this type of shipping service will give it “a lot of strategic value.”
Shipping is a trillion dollar industry, according to MIT Technology Review.
Amazon Expands Into Ocean Freight
Move marks online retail giant’s latest step in effort to build out its delivery business
The online retail giant has begun handling shipment of goods by ocean to its U.S. warehouses from Chinese merchants selling on its site - taking on a role it previously left to global freight-transportation companies.

The move marks Amazon’s latest step in a multiyear effort to build out its delivery business. The company doesn’t own or operate ships, but is openly acting as a global freight forwarder and third-party logistics provider, categories of companies that book space on ocean vessels and truck goods between ports and warehouses.

Amazon has helped ship at least 150 containers of goods from China since October, according to shipping documents collected at ports of entry that were compiled by Ocean Audit, a company specializing in ocean-freight refund recovery for shippers.

This month, Amazon started posting rates for new services such as sorting, labeling, and trucking shipments that traditionally are handled by global freight companies. The services and rates were posted under the name of its Chinese subsidiary, Beijing Century Joyo Courier Service Co., with Distribution-Publications Inc., a widely used platform for such information.
Full story The Wall Street Journal

HT: Mish's Global Economic Trend Analysis