Amazon launches third-party logistics platform
The third-party logistics space has a major new player — one that could eventually challenge UPS and FedEx.
In a major new initiative, Amazon is opening up its full portfolio of freight, distribution, fulfillment and parcel shipping capabilities to businesses of all types and sizes — not just sellers on the company's marketplace. With the launch of the new "Amazon Supply Chain Services," Amazon's key supply chain and logistics solutions are now available to businesses in industries such as healthcare, automotive manufacturing —and retail. Initial customers of Amazon's new business offering include apparel retailers Lands’ End and American Eagle Outfitters. (More on the two deployments further down in article.)
[READ MORE: Amazon hosts automated supply chain services suite]
Amazon Supply Chain Services also provides access to the retailer’s AI forecasting models and supply chain data set, with the goal of helping users optimize inventory placement. Core offerings include:
- Freight: Amazon’s transportation network includes ocean, air, ground, and rail freight, supported by a fleet of 80,000-plus trailers, 24,000-plus intermodal containers, and 100-plus aircraft. Service options include time-sensitive shipments, streamlined booking, customs clearance, and end-to-end shipment visibility.
- Distribution and fulfillment: Amazon enables businesses to import inventory from overseas, store inventory in bulk, position inventory closer to demand, and fulfill customer orders across all channels within a single network by leveraging a unified inventory pool and advanced forecasting capabilities.
- Parcel shipping: Amazon provides shipping solutions for orders placed across all sales channels, with two-to-five-day delivery speeds and seven-day-a-week service, based on the retailer’s own transportation network. Businesses can pick up parcels from their own warehouses or third-party providers, have access to drop-off locations, and gain visibility into shipment tracking from label creation to dropoff, with features like photo-on-delivery.
Land's End/American Eagle Outfitters
Retailers currently leveraging Amazon Supply Chain Services include Lands’ End, which is using a unified inventory pool within Amazon’s network to fulfill orders across multiple sales channels; and American Eagle Outfitters Inc., which is using Amazon’s parcel shipping network to deliver online orders from its American Eagle and Aerie website directly to customers nationwide.
“Amazon is one of our key e-commerce partners, and we’re excited to leverage Amazon Supply Chain Services to position inventory closer to customers so we can reach them even faster,” said Andrew McLean, CEO of Lands’ End, in a corporate blog post. “This consistency is central to our solutions-based approach, enabling us to serve customers with confidence and agility, especially during peak seasons.”
In commentary provided to Reuters, Parth Talsania, CEO of Equisights Research, said Amazon is attempting to convert logistics from a cost center into an infrastructure product that could become a significant profit driver like the company’s Amazon Web Services hosted cloud subsidiary.
"For UPS and FedEx, this is not immediate disruption, but it is a structural warning shot, especially in e-commerce-heavy lanes where Amazon already has density, data and delivery-speed advantages," Talsania said in his comments to Reuters.
Businesses can utilize a centralized console to discover, select, and sign up for various Amazon Supply Chain Services offerings.
“Amazon is bringing the infrastructure, intelligence, and scale of its supply chain services — proven over decades — to businesses everywhere, much like Amazon Web Services did for cloud computing,” said Peter Larsen, VP of Amazon Supply Chain Services. “Supply chain wasn’t just a function at Amazon — it was core to providing an exceptional shopping experience. Our differentiator. The reason we could offer fast, dependable delivery that nobody else could. And with the launch of ASCS, we’re confident we can give any other business access to the same cost efficiency, reliability, and speed that we’ve built for Amazon customers.”
