360 Logistics News:

Amazon seems to be intensifying its competition with traditional freight forwarders by launching a “completely automated” manufacturer-to-customer delivery service designed for third-party sellers.

Announced at its annual seller conference, Accelerate, Amazon’s new service, called “Supply Chain by Amazon,” aims to provide a straightforward, speedy, and cost-effective solution to the increasingly unpredictable and complex logistics challenges faced by sellers. Dharmesh Mehta, Amazon’s VP of worldwide selling partner services, stated, “Supply Chain by Amazon will directly collect seller inventory from the factory and oversee the entire supply chain logistics process, ensuring delivery to customers’ doorsteps.”

Amazon also claims to offer a 25% cost reduction for cross-border transportation bound for its own warehouses and distribution centers, which represents an 80% reduction compared to its existing Fulfilment by Amazon service. Additionally, the system will automatically replenish sellers’ stock levels to meet anticipated demand.

However, some forwarders have expressed skepticism, describing the service as essentially what Amazon already does with its courier business for small-scale organizations selling on its platform. They believe Amazon will subcontract most of the logistics to forwarders and transport operators, taking a margin or profit in the process, as is their established business model.

The launch of Supply Chain by Amazon follows recent moves aimed at strengthening Amazon’s presence in the logistics industry. This includes a 10-year deal with Hawaiian Airlines to operate 10 A330-300 converted freighters, with the first aircraft entering service in July and another scheduled to come online later in the year. Additionally, Amazon’s surprising integration of its “Buy with Prime” feature on Shopify suggests a potential shift in strategy for both companies, as Shopify had previously been seen as a competitor to Amazon.