Amazon Competition May Affect 3PLs More Than Parcel Carriers

Consumer expectations about the last mile experience has fundamentally shifted the goal posts for retailers everywhere. Excellence in logistics and supply chain is driving increased reliance on companies like FedEx and UPS, both having posted great recent earnings. Amazon, in typical Amazon fashion, isn't satisfied and taking matters into their own hands. Not only have they recently been awarded a patent for package pickup on public busses, with "a fleet of 4,000 trailers (some reports indicate up to 7,500 trailers) for transport between warehouses and fulfillment centers" they are ensuring the can own the delivery windows and shorten delivery times.

E-commerce makes up 7% of the U.S. third-party logistics market, and Armstrong points out that “Amazon is acting increasingly like a 3PL.” It estimates Amazon is acting like a 3PL for 12% of all business-to-consumer e-commerce shipments. Third-party sellers on Amazon’s marketplace represent more than half of all units sold through Amazon, and about half of those sellers use the company’s Fulfillment by Amazon program.


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