Amazon has been on the hunt to license or outright acquire freight services technology, sources told the Wall Street Journal. Amazon has not commented on the report.
Ryan Petersen, CEO of freight logistics startup Flexport, discovered in January that Amazon’s China unit registered as an ocean freight forwarder, an indication that the e-retail giant is interested in either tightening up its own logistics or providing logistics to other parties—or both.
Petersen told the Journal that when Amazon approached his company for a presentation on Flexport's technology, “I declined politely.”
The global business of freight forwarding is worth some $150 billion annually, according to the Wall Street Journal. Designing the most efficient routes is essential to complex freight operations: It's something that is increasingly done through tech, and it remains a burgeoning but still-evolving area.
Amazon's entry into the ocean freight forwarding market would be significant because it could allow Chinese factories a more direct path to American consumers, Flexport's Petersen noted in his January blog post. Adding superior technology would only enhance Amazon's capabilities.
Indeed, Amazon’s own report on the matter, according to leaked documents obtained by Bloomberg in February, describes the ability for “one click-ship for seamless international trade and shipping,” and says "Sellers will no longer book with DHL, UPS or FedEx, but will book directly with Amazon.”
The move could be a boon to Chinese sellers interested in reaching the American market as well as Amazon’s other markets globally, especially considering the expectation that Amazon would keep costs down, Petersen told Retail Dive earlier this year. "I don't think people realize how threatening this is for their U.S.-based merchants, who are making money selling goods from Chinese factories," he said.
But Petersen also said that many Amazon Marketplace sellers would be unlikely to give Amazon, a rival retailer, the kind of information that an ocean freight company would be privy to, while any full-blown development of Amazon’s ocean freight forwarding capabilities is likely still months, if not years, away.
Still, these reports affirm that Amazon does indeed have ambitions in this area, in contrast to Amazon CFO Brian Olsavsky recently downplaying the news that it had registered as an ocean freight forwarder and had increased its own delivery capacity with trucks and cargo plane leases.