Is Amazon going to cut out delivery companies altogether?

With reports this week of Amazon trialling air cargo deliveries, and a definite absorption of its road delivery network from third party businesses such as Royal Mail, FedEx and UPS, could the online giant be planning an internal delivery business that cuts out the middleman altogether?

Apex Insight reported earlier this week that Amazon may well be running an air cargo service across the mainland US out of a based in Wilmington Ohio. Given past delivery problems using UPS air cargo this may be an attempt to control the supply chain entirely by the international e-commerce giant. In this case it is chartering flights through a third party but would not be piggybacking on another major delivery company. Many international delivery companies charter aircraft to offset the risk that comes with variable markets already – FedEx TNT have divested TNT’s aircraft to a third party as part of the merger yet will still use their aircraft. Amazon could do the same for short haul flights and even longer journeys all over the world – the EU could be a next step should it be successful in the US.

On the road, Royal Mail is losing business from Amazon in the UK as Amazon increasingly delivers its own goods across the UK. Amazon is building new warehouses all over Europe and looks likely to be expanding its internal delivery reach to all but the least populated areas in the UK. This is being replicated in nearly every territory where the online giant has significant business too.

These signals have led some commentators to suggest that one day Amazon may run its entire business from click to drop through its own distribution network. The company has the revenues to manage such a move and in the next few years will show whether these suspicions are indeed the truth.

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