Is Amazon about to Enter into Third Party Logistics?

By April 11, 2015April 11th, 2016No Comments

Could Amazon soon disrupt another billion-dollar market? Many experts say “yes,” citing various example industries the ecommerce giant has already rattled and the strides the company has made toward expanding its transportation and logistics services.

Amazon’s Expands into 3PL

Currently, Amazon operates 167 distribution facilities worldwide―92 in America alone. Expanding into third-party logistics could be a $5 billion dollar opportunity for Amazon, even if it only captures 1% of marketshare. Furthermore, Amazon is able to leverage its position as a leading e-commerce, which attracts 170 million unique visitors monthly.

Amazon has been experimenting with delivery models for some time, such as taking control of “last mile” delivery. This includes using its own trucks and cutting out UPS and FedEx. In addition, the company has recently implemented an Uber-like system, using freelance drivers and a mobile app for one-hour delivery services. In 2015, the company was in talks to lease an air fleet, and some customers have even reported seeing their packages delivered by Amazon trucks.

Now, Amazon has filed to function as a freight forwarder. By furthering expansion into the 3PL industry, Amazon will be well-positioned to revive growth, reduce global shipping costs and have more control over processes.

The Takeaway for Businesses

The logistics industry is ripe for technology-driven disruption. No company is better positioned to leverage technology to broaden margins than Amazon. The company is not likely to keep this service in-house but instead offer it as a third-party service to other businesses. Amazon Logistics Services may deploy as a new platform in the next decade, threatening to unseat existing freight leaders.

With 41 years of experience, M&W Logistics Group, Inc. is well positioned for this type of disruption. We offer customized warehousing and 3PL solutions and have a long standing reputation of exceptional service. In addition, we continually remain up-to-date with the latest technology to ensure customer satisfaction. To learn more about M&W Logistics Group, Inc., contact us today at (615) 256-5755.