Amazon announced on Monday that the new service, Amazon Supply Chain Services (ASCS), will give businesses access to its freight, distribution, fulfilment and parcel shipping capabilities, whether or not they sell through Amazon. The company said the service is aimed at businesses “of all types and sizes”, including those in healthcare, automotive, manufacturing and retail.
“Amazon is bringing the infrastructure, intelligence, and scale of its supply chain services — proven over decades — to businesses everywhere, much like Amazon Web Services did for cloud computing,” said Peter Larsen, vice president of Amazon Supply Chain Services, in the company’s announcement.
Amazon says ASCS will allow companies to move, store and deliver goods ranging from raw materials to finished products using the same supply chain that supports Amazon.com.
ASCS will allow companies to move, store and deliver goods using the same supply chain that supports Amazon.com. Infographics: Amazon News
The offer includes freight, distribution, fulfilment and parcel shipping. According to Amazon, the freight network spans ocean, air, ground and rail transport. Industry reports citing the company’s launch materials say the network includes more than 80,000 trailers, over 24,000 intermodal containers and more than 100 aircraft.
Supply Chain Dive reports that the service also uses Amazon’s network of more than 200 US fulfilment centres, and includes full truckload, less-than-truckload and intermodal transport, air freight, China–US inbound shipping with customs clearance, bulk storage and distribution, and parcel shipping within two to five days.
Amazon said Procter & Gamble, 3M, Lands’ End and American Eagle Outfitters are among the first companies to use the service. P&G is using Amazon freight services for raw materials and finished goods, while 3M is using the network to move freight from manufacturing sites to distribution centres, according to Amazon.
Logistics shares fall after announcement
The launch immediately hit shares in established logistics groups. Reuters reported that UPS and FedEx shares fell by more than 9% after the announcement, while DHL, GXO and Maersk were also affected. Reuters framed the launch as a direct challenge to UPS and FedEx in the US logistics market.
According to The Wall Street Journal, the fall of UPS and FedEx shares made both companies among the worst performers in the S&P 500 on the day. Amazon shares, by contrast, rose.
