Amazon's acquisition of delivery company hints at larger ambitions

Dive Brief:

  • Amazon plans to wholly acquire French delivery company Colis Privé, of which it already owns 25%, the Seattle Times reports. In 2014, Amazon also acquired the right to purchase 4.2% of U.K. delivery company Yodel.

  • The e-retail giant has also purchased thousands of semitrailers here in the U.S., contracting with trucking companies to haul them. 

  • Amazon is investigating the launch of its own air-freight operation over the next few years, starting with up to 25 leased cargo planes, sources told the Wall Street Journal last month. And of course it's been at the forefront of drone delivery.

Dive Insight:

Amazon is, above all, a retailer — one that’s pretty much single-handedly defined e-commerce and changed nearly all aspects of retail in the process, at least in some way. And it’s also a tech company. Its Amazon Web Service powers many corners of the web, like Netflix’s and Spotify’s streaming services and Obamacare’s, among others.

But increasingly Amazon is also a shipping company. The Seattle Times reports that its acquisition of package delivery companies in Europe is a sign that it’s boosting its delivery prowess overseas, telling news outlets there that the companies it’s investing in and acquiring will also be delivering packages for other retailers.

Building a delivery network, in the U.S. and elsewhere, could help give the retailer more control over its fulfillment and save costs. But if it becomes a shipper for more than itself, it could also disrupt the package-delivery business as it has the retail business, some analysts believe.

“They have the opportunity to disrupt this market and generate a lot of revenue,” Robert W. Baird & Co. analyst Colin Sebastian told the Seattle Times.

Amazon is already disrupting and in many ways driving the frenzy in last-mile, same-day delivery, though there’s a question about whether the cost of that will allow much more expansion in markets beyond big cities.

Amazon itself isn’t talking about its shipping ambitions, but it’s making some major moves here. The company will likely have to move somewhat carefully to ensure that its activity in this space can match or better the delivery prowess and customer service reputations of the likes of UPS and FedEx. Fulfillment by Amazon deliveries sometimes garner complaints from customers, which is not the kind of disruption that consumers will likely have much patience with.

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