The Evolution of Logistics and Supply Chains from Direct to Store Models to E-Commerce

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Logistics is Amazon's New Business?

 

Amazon, the E-commerce giant, has been working diligently on vertical integration. That the company wants to become its own logistic firm, is no longer a hidden fact anymore. In the U.S., it is already sending nearly half of its shipments — 47.6% itself. On the other hand, USPS, UPS, and FedEx account for 51.4%.

 

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With Amazon’s clear-cut intentions, it appears that FedEx will bear its brunt. Until recently, FedEx was playing down Amazon's logistics potential. Now, it is planning to renew its logistics contracts with the e-commerce giant. Amazon’s announcement about Amazon Air's expansion, the operations of its aircraft fleet, into Asia is perhaps in response to it.

Amazon has also entered in an agreement with Rite Aid to deliver its packages in their outlets. Rite Aid hopes that this will boost customer flow in its stores. The company is moving ahead with small-scale last-mile delivery companies while utilizing subcontractors at the same time through Amazon Flex.

 

Will Amazon become a Full Time Logistic Service Provider?

 

The global logistics market stands at US$1.5 trillion. However, Amazon does not seem to be interested in foraying as an open-to-all logistic-companies at present. It is working on its own e-commerce activities only. Nonetheless, the company may look to improve its turnover by providing logistics as a service. If it plans to do so, it will emerge a major threat to other logistics and supply chain companies.

 

Logistics is a massive business of transporting all kinds of goods across the world, and Amazon already holds a share of 49% in online shopping in the U.S. alone, which equals to almost 5% of all retail sales. Logistics is likely to be more efficient in the days to come, thanks to machine learning, a field in which, Amazon is clearly a winner among all.

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