Amazon’s Potential Effect on the Shipping Industry

T Nguyen

April 20, 2012


The carrier system has for a long time been a very oligarchic system, only made up mainly of two carriers, UPS and FedEx.  Because of these two carriers, the rules of the shipping industry have always been based on comparing these two carriers’ prices and agreements and can, for insightful businesses, create a method to reduce shipping costs overall.  However, this very system could change in the near future according to a new Forbes article.

Forbes reports that Amazon, the website retail giant, could not be only going after Apple’s marketshare in the tablet and smart device markets but also could be targeting the shipping industry as well or more specifically, the logistics.  Instead of an outright entry into shipping, Amazon has made increasingly larger decisions into logistics system such as its purchase of Kiva, which makes robots for warehouses, earlier this year to continue cutting it’s operational costs.  Amazon is also heavily into leveraging third parties onto it’s website for further monetary gains while creating an easy-to-access markteplace.  Even further, Amazon is testing pick-up centers instead of using direct shipping.  These moves have started to encroach their market into the logistics territory.

Although it’s simply one competitor, much like Windows attempts to encroach into the smart phone market space of Apple and Google, Amazon is encroaching on a very steady shipping industry and could have bigger implications in the near future.  FedEx, for instance, has had a record 2011 and with a new competitor, those record years will be consolidated amongst more competition and less potential customers.  For the consumer, it should start off, at least, as a positive platform simply because it will add an additional competitor into a small market place although again, how far Amazon can be expected to invest into the field has yet to be determined.  Reducing shipping costs should become much more common along with discount opportunities and fierce bidding wars between the competitors.

Source will continue to help businesses best figure out their shipping contracts in whatever direction the future holds for the shipping industry.  With a history of successful savings for shipping companies through parcel audits and invoice analysis, our experienced employees continue to stay up-to-date and well-informed about the future of the shipping industry and ways to help businesses out.

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