Two new developments from Amazon will affect the trucking and logistics market: Moving to one-day Prime shipping and growing its own freight-matching platform.
In a conference call about the company’s quarterly earnings report, Chief Financial Officer Brian Olsavsky explained that the company expects profit to take a hit in the second quarter as Amazon transitions its Prime free shipping to one day instead of two. Amazon already offers one-day delivery on some products. But Olsavsky suggested that the standard free two-day shipping that is the big selling point for paid Amazon Prime memberships will be improved to a one-day schedule globally, reports MarketWatch.
Just a few days later, news hit that the company had quietly launched a beta version of its own freight-matching brokerage service in Connecticut, Maryland, New Jersey, New York, and Pennsylvania. The site, at https://freight.amazon.com, quietly launched last year, but several news organizations noticed this week and the news spread.
Freight.amazon.com advertises full 53-foot truckload services, saying, “Tap into the scale of Amazon as we extend our carrier network to give you best-in-class service at great rates.”
Not many details are yet available, but published reports indicated that Amazon is offering access to its trucking network without charging a brokerage fee. “Rival brokerage firms, on the other hand, can't eliminate their markups – that's how they make money,” noted Daniel Kline with Motley Fool. “To compete, both trucking companies and brokerages will likely have to cut their rates.”
Arguably in response to the news, stock prices fell Monday for other brokerage and third-party logistics businesses, such as C.H. Robinson and J.B. Hunt.
In an email to HDT, Amazon spokeswoman Rena Lunak shared a statement in response to the reports about Freight.Amazon.com. "We work with many line-haul service providers in our transportation network and have long utilized them to carry loads for Amazon. This service, intended to better utilize our freight network, has been around in various forms for quite some time. The analysis suggesting dramatic undercutting of pricing is false."
In its quarterly earnings report, Amazon also announced a few other developments that could affect the trucking and logistics markets:
- Amazon Day, which gives Prime members the option to choose a day of the week for their packages to arrive, became available to all U.S. Prime and Business Prime members. Millions of Prime members are now using Amazon Day, making it easy for customers to group and receive purchases, in many cases, in fewer boxes.
- Shipment Zero, the company’s vision to make all customer shipments net zero carbon, with the goal of making 50% of all shipments net zero by 2030. To track this progress, Amazon will share its company-wide carbon footprint as well as related goals and programs later this year.
Editor's note: Updated 4/29/19 at 9:15 EDT to include information from Amazon, including the fact that Freight.Amazon.com has been live since last year, not launched just days ago as some media reports suggested.
Originally posted on Trucking Info