How Amazon is Disrupting the Transportation and Logistics Industry

Synter Resource Group Amazon Transportation and Logistics

This blog was originally posted on here: Synter Resource Group’s Transportation and Logistics Website


In a recent regulatory filing, Jillian D’Onfro of Business Insider reveals that Amazon called itself a “transportation service provider” for the first time, injecting itself as a player into the trillion-dollar freight industry.  Amazon is not only looking to provide transportation and logistics services for its own company, but also many suspect will offer these services to third parties, as it has done with other services.

This build-out of its infrastructure for business-to-business services has been occurring for some time in other areas, including its Amazon Web Services, Fulfillment by Amazon and Kindle Direct Publishing.  Becoming a Transportation Service and Logistics Provider is just one more spoke in the wheel of providing comprehensive business services to third parties.  Amazon has repeatedly demonstrated that they can develop the technology for their own needs, and then, scale it to accommodate other businesses.

This is no small change either.  The international freight market is worth $1 trillion annually.  Amazon is well positioned to truly impact this market as the international freight market is thought to be manual and inefficient.  Enter Amazon with the latest technology, efficiency, and scale, and you have the makings of a revolution in the industry.  Just look at Amazon’s warehouses, where there are tens of thousands of robots at work.  This is implementation of automation at a significant level!

In thinking about delivery systems, we all remember when the Amazon Prime offer hit the market.  Most of us have taken advantage of that service, reducing our trips to stores and other venues, saving gas and reducing stress.  And, now, Amazon is expanding its delivery services with the introduction of drones.

Moreover, another giant in the industry is looking to team up with Amazon — Uber with driverless vehicles.  As a recent article, a contributing author at Inc42.com commented, “Both Amazon and Uber are in the process of launching initiatives that focus on connecting businesses that need to ship things with truck drivers directly. Uber Freight would work much like their current passenger program, but with freight on autonomous trucks instead of people in cars. Amazon’s service seems to be more targeted to meet their goal of becoming a global freight broker by cutting out the middleman via an app that matches trucks with shipments.”

Pricing will definitely be a factor, though.  Apps may streamline the process, but, business people are always looking for the best price.  So, long-term and volume freight may not be affected by the new revolution in logistics technology.

However, with hundreds of fulfillment centers, and continuing cutting-edge technology breakthroughs, Amazon might be the only company capable of disrupting the status quo and giving the other giants in this industry a run for their money, including such companies as UPS and DHL.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s