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Overview:

Amazon has announced that it will pause its logistics service “Amazon Shipping,” which was only available to shippers in select cities including New York, Chicago and Los Angeles. This doesn’t affect the logistics of their own deliveries, only their 3PL service. Morgan Stanley anticipates limited shipper impact from this pause, due to the fact that Amazon Shipping was still in the pilot phase in a limited geographic area. Exact details of this service and how it would compete with shippers like FedEx and UPS is not clear, but some say it appears Amazon never had the intention of competing for shipments outside its network. Amazon Logistics is able to provide flexibility and capacity for the Prime channel, which experiences large peak seasons. Amazon noted that the coronavirus is not the reason they have chosen to pause this service.

 

 

Excerpt:

Morgan Stanley, previously bullish on the service’s prospects, anticipates limited shipper impact from Amazon’s pause since Amazon Shipping was limited in geographic scope and still in a pilot phase, and suggested most affected shippers will take their business to FedEx and UPS.

 

The exact details of the service, and the extent to which it competes with FedEx and UPS, have been fuzzy since reports of its existence first surfaced as early as 2017. A service rate card, obtained by iDrive Logistics in 2019 and shared with Supply Chain Dive last year demonstrated a simplistic service that would be unattractive to most shippers, according to iDrive executives at the time.

 

Read the full article in Supply Chain Dive.

 

 

Thoughts from Kasia Wenker, ITS Logistics Director of Distribution Sales:

By utilizing the purchasing power of a third-party logistics provider like ITS Logistics, you can act like a large shipper. Because 3PLs work with a large number of customers and orders, they are able to procure discounts on shipping for their customers with multi carrier networks. This can allow cheaper shipping costs for you, allowing you to provide cheaper or free shipping for your customers.