Amazon targets e-retailers with “price-aggressive” Global Logistics expansion
Amazon is taking another giant step into the freight and logistics sector by broadening its range of ‘Global Logistics’ services for e-retailers selling through its marketplace with aggressively-priced intercontinental ocean and air freight shipping services.
Currently focused on ocean and air shipping from China/Hong Kong to the US and Europe, the Amazon Global Logistics (AGL) portfolio will be extended geographically to freight transportation from other Asian countries, including Vietnam, India and Thailand.
In parallel, Amazon is now marketing these intercontinental freight services aggressively with low prices, according to German business newspaper Handelsblatt. For example, the company is apparently offering a rate of US$7,000 per TEU from Ningbo (China) to Rotterdam compared to the current market spot price of US$14,000.
According to experts, Amazon can leverage its buying power to secure capacity at low rates and thus offer attractive prices to retailers who have been forced to pay escalating container shipping costs over the past year and longer.
One-stop logistics provider
Under its ‘integrator-style’ strategy, the e-commerce giant is essentially seeking to become a ‘one-stop’ provider of international logistics, transportation and delivery services for retailers enrolled in its Fulfilment by Amazon (FBA) programme. These range from extensive warehousing, fulfilment and delivery services to the more recent expansion of trucking operations and Amazon Air flights for linehaul transportation in the US and Europe.
Now, against the pandemic-driven background of spiralling container rates, Amazon seemingly wants to fill the ‘ocean freight gap’ and establish a broader-based 3PL portfolio.
More origin markets
According to a dedicated web page, Amazon Global Logistics is currently available for shipping from mainland China and Hong Kong to the US, UK, Japan, France, Germany, Italy and Spain.
Looking ahead, Amazon added: “We are in the process of expanding our services to other geographies, including India, Vietnam, and Thailand, for select transportation modes. We plan to ship directly from these countries to fulfillment centers in the US, UK, EU, and Japan.”
Discounted prices
The company told prospective customers: “With Amazon Global Logistics, you can ship cargo from Asia directly to fulfillment centers in the US, UK, EU, and Japan.”
Highlighting the customer benefits, it continued: “You enjoy a streamlined, end-to-end shipping experience, from cargo pickup at the origin to shipment to the fulfillment center. We offer competitive rates, a user-friendly portal to book and track your shipments, and customer support.
Amazon urged: “Set up your profile today and get up to an 8% discount on your ocean bookings for 60 days after onboarding.”
Broad service portfolio
The benefits of Amazon Global Logistics, according to the company, include shorter lead times by shipping cargo directly from origins to fulfilment centers, lower inventory handling costs “through more efficient logistics” and “competitive rates”, as well as convenient online booking and tracking of shipments.
The service portfolio covers “Standard Ocean for cost-effective shipping, Fast Ocean for faster and frequent yet cost-efficient shipping, and Air for quick replenishments and exploring new markets by shipping in small quantities”, Amazon explained. The Ocean Freight services include FCL and LCL shipping.
In addition, the portfolio offers end-to-end solutions including local pickup, palletization, labelling, cargo insurance service, and customs clearance at origin and destination.
Logistics investments
Meanwhile, Amazon is continuing to spend heavily to expand its logistics infrastructure around the world.
In Germany, the company will open a new logistics centre in Kaiserslautern in autumn 2022, creating about 1,000 new jobs in the first year of operations. This will be the company’s third logistics centre in the state of Rhineland-Palatinate.
Last autumn, Amazon announced it planned to open eight new distribution and delivery locations across Germany by the first half of 2022, creating over 3,000 additional jobs. These would be in Erding, Hof and Neu-Ulm (Bavaria), Wenden (North Rhine-Westphalia), Friedrichsdorf and Weiterstadt (Hesse), Dummerstorf (Mecklenburg-Vorpommern) and Helmstedt (Lower Saxony).
In Italy, the company will open a distribution centre in Ardea, close to Rome, this spring, creating about 200 additional jobs. This follows the opening of three facilities in the country last year, at Novara, Spilamberto (MO) and Cividate al Piano.
Elsewhere, Amazon will open its first fulfilment centre in Ireland this spring. The 58,530sqm facility near Dublin, supported by two local delivery stations, will enable faster deliveries across the country.
