Forget the drones, Amazon preps its own cargo container ship operation out of China Amazon may well launch a maritime shipping operation that will allow the retail giant to ferry tons of cargo. Ryan Peterson, CEO of freight forwarding company Flexport, dug up a filing with the US Federal Maritime Commission listing Amazon, through its China subsidiary, as a registered freight provider. The registration, says …
For a start forget the marketing Amazon was never meant to be a retail company, they are a logistics company. Ideally they want to warehouse for manufacturers and then directly deliver the goods to customers. So all they are doing is being a logistics company which now is further extending into shipping and transport. Why are they doing this, because the other logistics companies who are asleep at the helm, with regard to retailing for direct deliveries to customers, already have transport and shipping arms.
So the question is whether or not the other logistics companies will wake up before it is too late and create their own internet retail arm to feed into their logistics, shipping and transport arms.
(as a consumer)
I occasionally buy something from a no-name Chinese company, via Amazon, based solely upon reviews.
"Anker" is a great example. No idea where it comes from, who owns it, why it exists - but I know the 3 or 4 things I've bought with that label on them have been faultless and incredible value.
There's no wanky "Designed in the USA" label on them - they're designed in China, made in China and deserve to be bought by the world.
Amazon's own brand was the start - I've got a few amazon batteries, amazon HDMI cables and all manner of what I considered to be 'commodity goods'. I was reassured by the amazon brand and amazon ensured whatever OEM they selected made something good.
Next step is surely taking a Chinese brand like Anker and pushing it in bulk. Anker doesn't need to create an expensive UK marketing operation to penetrate the west, one suburban Curry's store at a time.
Amazon has the reach. Amazon has the ability to identify something we're happy with in our tens-of-thousands. If Amazon agrees to shift this item by million, then both sides wins.
Or looking at it another way, currently amazon offers a bazillion different "Li-Ion battery packs that can charge a device over USB".
Assume amazon makes a fixed percentage of sale price on whatever you buy - it makes sense for them to reduce the selection, and reduce the selection to high-quality items.
@goldcd - This move makes a good deal of sense for Amazon. It means they have more control over their costs and can be sharper with their pricing.
I doubt this move is see the wholesale pricing. Amazon probably already knows the exact wholesale price or has a very good estimate. Depending on the price and freight terms Amazon may be quoted price ex works with freight separate - there are several ways freight and insurance can be quoted. Plus, I believe the importedr pays the duty in the US not the exporter so they would see the proforma invoice.
I would guess this will also help with partial container loads. For some goods you could easily take 8 different manufacturers products and share a container.
To do this normally is complicated and pro-rata a lot more expensive. As the container needs to be un-packed and a distribution facility used to onward the goods at the other end. So the customer has to use a mail company for the task who has ties with both countries and operations in each (rather than buying space directly with the shipping company).
If the destination is a single Amazon warehouse and Amazon is choosing the quantities of goods to go in there, the whole process can be streamlines and much cheaper. They can fill each container with the exact amount of goods in the right amount of time to fulfil their stock requirements, at minimal cost.The whole process becomes much easier and cheaper for the Chinese SME and the customer is already found for them, via Amazon.
Just think: Amazon technology can launch huge container ships running like driver-less cars, with GPS guidance, auto-pilot control, and radar avoidance systems to arrive at a designated harbor entrance where local harbor pilots will board and complete the docking maneuver.
Reminds me of the case where a freighter in the Red Sea arrived in port with the mast and rigging of a sailboat hanging from its anchor ... and another cruising couple mysteriously disappeared in mid-ocean.
Container ships already have crews at pretty much the minimum to staff 3 watches = 12 people for a vessel 1/4 mile long.
The crew are really there for fires and other emergencies - the words biggest container ship nearly sank in the Suez canal when one of it's prop blades decided to take a short cut through the hull. It was only saved because of the crew.
The crew are primarily there to maintain the ship.
Maintenance, servicing and even heavy repairs are done while under way.
Being out of action is very expensive, and drydock costs can quickly bankrupt an operator - assuming the ship even fits in a drydock at all.
When an engine breaks down the ship slows, the crew fixes it, and they simply arrive at port a few hours late.
Similar for hull repairs.
@Richard 12, I know I am a bit pedantic here but.
If a engine breaks down a ship will stop unless there are several engines, some have.
Engines are introduced into the hull at a very early stage when the ship is being built and started right then to deliver electricity for the building of the ship.
Those diesels are then never stopped like in port, or anywhere. But they are serviced while "alive" all through their life running.
There is a nice story about Emma Maersk on YouTube and as far as I remember they are servicing one of the twelve cylinders during the trip to Europe loosing no time at all. Massive engines giving 120 000 hp.
Once a merchant sailor, long ago, and some of it remains in ones heart forever.
Ps, some ships are built as parts and then welded together in the water and have, sort of, never seen a dry dock.
Just think: Amazon technology can launch huge container ships running like driver-less cars, with GPS guidance....
Where did it say anything about Amazon owning or operating ships? The headline is wilfully misleading (on a free to view website we can't complain), but the article talks about Amazon acting as a shipper, a freight forwarder and controlling vessels. You don't need to leave your desk to do any of that. Which makes sense. Why would a retail and logistics company want to get into ownership and operation of container vessels, when all seaborne transport is heavily cyclical, routinely sees ship owners going bust, and in the longer term makes very thin margins?
Amazon's logistical expertise will be light years ahead of the tuppenny halfpenny shipping agents used by Chinese manufacturers, and by better control of freight despatch, consolidation & forwarding, it can move the China-US freight network closer to a just in time operation, and take out other inefficiency costs in the movement of ships. And it could use its volume on trans pacific trade to put the squeeze on other retailers.
All of which is good for Amazon. I suspect the company rather than consumers will benefit, I'm not convinced that competition will improve, and how the US nationally will benefit importing stuff from China even faster is even less clear. Last year the US imported about $350 billion more from China than China imported from the US.
I'm sure it all end well....
Especially as the EU is trying to close down the Luxemburg tax avoidance schemes.
Bwahahahaa! You think that's going to happen when one the architects of Luxembourg's tax haven structures (Jean Claude Junker) is president of the European Commission? They've already been omitted from the big list of EU blacklisted tax havens, presumably by some "bureaucratic oversight".
The EU: Committed to transparency, openness, fairness. Except when it isn't because it doesn't suit the toe rag politcos that pull the strings
For their sellers - no. These will be "disadvantaged". The usual methodology of avoiding tax by Chinese cheap tat peddlers goes out of the window. They definitely cannot register a 200$ + per item piece of electronics as a "present" any more.
In addition to that, Amazon will have no choice but to start rigorously enforcing VAT and customs duties on all tat sold this way. If they do not, their container service will fail to be competitive compared to the usual suspects (HongKong post and Taiwan post).
So, frankly, I am all for that. Let them do it. Any tax they squirrel by shifting costs into shipping will be pennies compared to what will be collected from all the VAT/Duties avoiders.
So Amazon take another step in their global, tax avoiding expansion that is destroying companies everywhere to being a complete monopoly. But it will be fine because they are American. If they were based in any other country, Amazon would have been ruthlessly hammered into the ground. Anti-competitive practice in the US against non US companies is rife an and the establishment will do anything to try and kill them.
What the US did to BP was despicable, yes they were at fault, but the amount of money being sought was just of the scale. The same is happening to VW.
Contrast that with the Exxon (Oil - Alaska), Union Carbide (Chemicals - India), Texas-Brine (USA Southern States - Salt).
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