The world’s largest online retailer on Monday (May 4) announced Amazon Supply Chain Services (ASCS), offering other companies access to its “full portfolio” of supply-chain and distribution offerings.
The service largely consolidates a package of existing products — air and ocean freight, trucking and last-mile delivery — into a new suite, it says companies like Procter & Gamble Co. and 3M Co. are already using.
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UPS tumbled 9.4%, and FedEx slid 8.5%. Amazon rose about 1%.
In a note on Monday, Bloomberg Intelligence analysts Lee A. Klaskow and Aanchal Aich wrote that Amazon’s new “offering looks more incremental than disruptive for FedEx and UPS.”
Amazon originally built its logistics network to store products it sold on its website. The journey to that warehouse, and from there to a customer’s doorstep, was handled by a supplier or delivery contractor.
But in the last decade, the Seattle-based company has built its own freight and delivery operation, reducing its reliance on partners who were not prepared for Amazon’s enormous growth. The company has assembled a cargo airline, tens of thousands of delivery vehicles operated by a bespoke network of contract drivers, and freight brokerage services for transit by cargo ship, rail and air.
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Amazon, over the last several years, started offering many of those services to other companies and on Monday said it was binding the offering into a single product.
“From our initial read, the ASCS offering consolidates existing segments of Amazon logistics into a unified, enterprise-facing offering,” analysts at Robert W. Baird & Co. said in a research note on Monday, adding that the company was likely seeking to better utilise its network outside of the peak holiday shopping season.
The new service’s name echoes Amazon Web Services — the cloud-computing unit that accounts for most of Amazon’s profit — and Amazon Health Services, the grouping of the company’s primary care, pharmacy, and other health products.
(Edited by : Jomy Jos Pullokaran)
