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New Threat To Freight Forwarder Industry

New Threat To Freight Forwarder Industry

For the last twenty years ago we watched how FedEX, UPS, and DHL expanded their global transportation networks by air, ocean and truck threatening freight forwarders. Now, Amazon is entering into the mix.

Amazon Logistics is rapidly building their global transportation network in China and worldwide. They are starting to deliver products for third party sellers more and more. According to a Bloomberg report "Sellers will no longer book with DHL, UPS, or FedEx but will book directly with Amazon". Will Amazon become a default carrier option for exporters and importers?

Amazon registered its Chinese subsidiary, Beijing Century Joyo Courier Service, as a freight forwarder in China. A broker that does not own ships but handles customs and other documentation allowing it to export cargo out of the country. Also, Amazon filed an application with the Shanghai Shipping Exchange to serve as a shipping broker for 12 trade routes, including Shanghai to Los Angeles and Shanghai to Hamburg, Germany.

Amazon submitted a similar application to the US Federal Maritime Commission in November 2015, allowing it to serve as a middleman for ocean freight services to other US-based companies that wish to export to other countries.The FMC granted Amazon's application to registered in the U.S. as a Non-Vessel Operating Common Carrier (NVOCC), enabling it to provide ocean freight services to other companies in the $350 billion ocean freight industry.

A 2013 Bloomberg News revealed Amazon’s senior management team proposed an aggressive global expansion of the company’s Fulfillment By Amazon service, which provides storage, packing and shipping for independent merchants selling products on the company’s website. Amazon will partner with third-party carriers to build the global enterprise and then gradually squeeze them out once the business reaches sufficient volume and Amazon learns enough to run it on its own, the documents said.

It has been rumored Amazon is considering leasing 20 Boeing Co. 767 freighter jets to control more of its delivery and cost. According to Bloomberg, Amazon plans to launch a new service, called Global Supply Chain by Amazon, which will create a total logistics operation, and this targets some of the “middlemen” who have overseen transnational trade, Bloomberg said.

“Amazon wants to bypass these brokers, amassing inventory from thousands of merchants around the world and then buying space on trucks, planes and ships at reduced rates,” Bloomberg wrote. “Merchants will be able to book cargo space online or via mobile devices, creating what Amazon described as a “one click-ship for seamless international trade and shipping.”

Perhaps only Amazon knows the full details of their Global Plan and how it will unfold. The Freight Forwarder Industry is following the developments closely. Will it benefit Freight Forwarders or it is the Next Threat?

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