Leaked documents show Amazon is making a big play to bypass UPS and FedEx
10.02.2016 341 views
On Tuesday, Bloomberg described internal documents from 2013 that laid out Amazon's plan to build up a global delivery network.
The project, internally called Dragon Boat, is intended to launch a new business called Global Supply Chain by Amazon as soon as this year, and would compete directly with companies like FedEx and UPS, the report said.
The document describes Dragon Boat as a "revolutionary system that will automate the entire international supply chain and eliminate much of the legacy waste associated with document handling and freight booking."
It said the plan is to control the entire delivery process, from picking up the product at the factory to delivering it to the end customer in the US. The report added that the plan is "proceeding," citing an anonymous source.
"Sellers will no longer book with DHL, UPS, or FedEx but will book directly with Amazon," the report said, according to Bloomberg.
A series of reports recently have highlighted Amazon's ambition to expand its logistics business. The company was reported to have bought a bunch of truck trailers, freight ships, and delivery flights, while in its latest 10-K, it described itself as a "transportation service provider" for the first time.
During its most recent earnings, Amazon CFO Brian Olsavsky seemed to play down rumors of a full-fledged logistics business, saying the initiatives were intended to supplement the company's existing partners, not to replace them.
But some analysts didn't seem to buy into Olsavsky's comment. Colin Sebastian of Baird & Co. believes Amazon is gearing up to create an in-house logistics department that would allow it to take full control of its fulfillment process and bypass its current shipping partners.
"Amazon may be the only company with the fulfillment/distribution sophistication and scale to compete effectively with incumbent service providers (UPS, FedEx)," Sebastian wrote in a recent note.
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