Amazon Global Delivery Business Could Edge Out FedEx, UPS, Rival Alibaba
Amazon got into the cloud early, and continues to dominate with Amazon Web Services (AWS). Now the company is reportedly planning to dominate the ground -- the entire fulfillment process, global shipping and logistics -- with a new in-house division called Global Supply Chain (GSC) by Amazon.
If the rumors are true, GSC could edge out delivery companies like FedEx, UPS, and DHL, and present a direct challenge to its biggest rival in China, Alibaba. The move by Amazon is not (yet) official, but it has been rumored for months, thanks in part to a series of secretive deals that hint at Amazon's grand logistical plan.
Unlike the company's highly publicized but certainly long-term work on delivery drones, Amazon has been rumored to be quietly acquiring and testing shipping assets since at least last September. For example, trialing an air cargo operation in Ohio as Vice reported, leasing 20 Boeing 767 cargo jets as the Seattle Times reported, and acquiring an ocean freight forwarding license from the U.S. Federal Maritime Commission as the blog Flexport discovered.
The Grand Plan Revealed?
Now Bloomberg's Spencer Soper has uncovered an internal company document dating back nearly three years that lays out a blueprint for the in-house global shipping operation Amazon may be building (via Business Insider).
The 2013 document describes an "aggressive global expansion," as Soper put it, of Fulfillment By Amazon services, proposing the company create a global delivery network to control storage, packing, and worldwide shipping -- the entire fulfillment, shipping and delivery process run in-house, from the factory all the way to the customer's doorstep.
That proposal is rumored to soon become reality through a new Amazon company called Global Supply Chain by Amazon, but in 2013 it went under the internal project codename Dragon Boat.
That codename hints at what the primary focus of the project is: to dethrone Amazon's chief Chinese rival Alibaba. But the new in-house end-to-end industry could bypass delivery companies in the U.S. like FedEx and UPS, along with the entire industry associated with processing cargo, trade, logistics, and transportation.
"Sellers will no longer book with DHL, UPS or FedEx but will book directly with Amazon," stated the 2013 report, according to Bloomberg's exclusive. "The ease and transparency of this disintermediation will be revolutionary and seller will flock to [Fulfillment by Amazon] given the competitive pricing."
Big Launch or Quiet Takeover?
Before it gets to that point, Amazon reportedly plans to partner with third-party intermediaries in the shipping and delivery process, while at the same time building its internal knowhow, business volume, and global assets, eventually putting those partners out to pasture when GSC is on its own two feet.
Amazon hasn't commented on the story, and it remains unknown if the company's global logistics plans are ready to be made public in the near future or not.
As with other industries dominated by Amazon, such as its AWS cloud services and book publishing, there's just as likely to be little to no fanfare accompanying the launch of its global shipping ambitions. The company could just quietly begin insinuating its supply chain's reach across the globe -- until before you know it, your packages are arriving at your doorstep exclusively from Amazon trucks. Only then, come the drones.