Amazon moving into sea freight?

Online giant Amazon has filed for a license with the US government to become a freight forwarder between the US and China. It has filed for permission to be a ‘non asset holding ocean freight forwarder’ so for the time being it will not be buying its own ships.

Interviewed by US newspaper USA Today, John Haber, CEO of Spend Management Exports, said, “This means they can provide ocean freight services for other companies. Looks like they are indeed moving quickly into the transportation business.”

Apex Insight has recently reported how the company is leasing aircraft for EU and US internal air freight deliveries, taking on international air delivery businesses such as UPS that have been serving the company for many years. Where the air freight business could seriously damage UPS and its final mile delivery business the likes of Royal Mail due to over exposure by both to its business, what could the ocean freight business harm?

The answer is that it could hurt businesses that use Amazon’s Marketplace who resell Chinese goods on Amazon.com. These companies buy direct from Chinese factories and sell on Amazon. If you want some goods delivered at 30mph over 7000 miles of Pacific Ocean then do not expect them delivered over night though – it frequently takes four to five weeks to get your goods this way, though the price per unit of goods for delivery is almost negligible.

Though the license is to transport third parties’ goods from China to the US, don’t expect many major customers such as Walmart to dive in as this could give the online giant insights into their supply chain and further cost them business.

That Amazon is developing a worldwide in house transportation and delivery system is now beyond dispute. Where this is going is still to be clarified…

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