- 10 February 2016
- Transport / Logistics Services
Amazon is said to be expanding its logistics operations in China, including handling cargo and customs for its goods headed to ports in Japan, Europe and the US. This could put it in a position to compete with the companies it used to be a major client of such as UPS and DHL.
It is said that the company is under pressure from investors to drive down its shipping costs, that rose 37% in the last quarter compared to a year ago. This is probably the reason the company is known to be bringing many of its air freight, delivery and even sea freight operations in house. Apex Insight has reported rumours of its piloting air freight operations in Europe and the US, as well as its move to deliver its own parcels around much of the EU and US.
The news was revealed when it filed documents with regulators to get licenses to run its logistics operations in the country. The online giant registered its Chinese subsidiary Beijing Century Joyo Courier Service, as a non fleet owning freight forwarder in November with Chinese and US authorities. The company has also filed an application with the Shanghai Shipping Exchange to serve as a shipping broker for twelve trade routes, including trans Pacific routes and routes to Europe.
Referring to the routes between Shanghai and Los Angeles and Shanghai and Hamburg, John Manners-Bell, head of Transport Intelligence said, “These are major gateway ports. They appear to be laying the foundation for a large forwarding operation.”
Some industry insiders suggest that this move is designed to make it easier for Chinese exporters to get their goods to Amazon warehouses around the world for distribution. This would be similar to the Fulfilled By Amazon (FBA) scheme only at the other end of the supply chain.