As far back as 2013, an internal report code named “Dragon Boat” envisaged a flow of goods from manufacturers in China and India through Amazon Logistics shipping, arriving at local Amazon warehouse in the west and then with Fulfilment by Amazon being sold and sent out with Amazon’s local couriers to the end customer.
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The project would also reportedly mirror Amazon’s gradual entry into cloud computing operations. According to Reuters, shipping costs have risen by 37 percent in the most recent quarter. Last month, a San Francisco logistics company called Flexport posted a blog noting that Amazons Chinese subsidiary registered in the U.S.as a Non-Vessel Operating Common Carrier, enabling it to provide ocean freight services to other companies in the $350 billion ocean freight industry.
Amazon also filed an application with the Shanghai Shipping Exchange to serve as a shipping broker for 12 trade routes, including Shanghai to Los Angeles and Shanghai to Hamburg, Germany. “They appear to be laying the foundation for a large forwarding operation”, said John Manners-Bell, who heads Transport Intelligence, a logistics analysis firm. The company mentioned in a document that it would charge clients between $530 and $2530, to deliver a 40 foot dry van container from Shanghai to Hamburg, depending on volume. The company offers a suite of logistics services such as domestic delivery and handling the import and export of goods. “Merchants will be able to book cargo space online or via mobile devices, creating what Amazon described as a “one click-ship for seamless global trade and shipping”.
As described in the Amazon report, Dragon Boat would out-Alibaba Alibaba – China’s direct-sale online marketplace – by “automating the entire worldwide supply chain”, the documents said.
For the 4Q15 earnings call, Brian Olsavsky, CFO of Amazon, said, “The Amazon trucks, we did invest in those – this past year”.
Amazon rolled out thousands of its own trailers and launched an Uber-like delivery service previous year to handle the so-called last mile of delivery, taking packages from distribution centers to customers’ homes.
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Amazon plans to initially team with third-party carriers, just until its business gets big enough but will eventually phase them out.
