Amazon Opens Up Its Logistics Networks To Any Business

After reducing its reliance on the U.S. Postal Service and other carriers, Amazon is opening its own logistics and delivery services to other companies. “Today, Amazon announces Amazon Supply Chain Services (ASCS), opening its full portfolio of freight, distribution, fulfillment, and package shipping capabilities to businesses of all types and sizes, not just Amazon sellers,” the company wrote in a press release.

Amazon is launching the new service with a few major companies, including Procter & Gamble, 3M, Lands’ End and American Eagle Outfitters Inc. For 3M and P&G, Amazon Freight Services will ship products from manufacturing sites to distribution networks and fulfill orders directly to Lands’ End and American Eagle customers.

Much like Amazon Web Services (AWS), Amazon designed its logistics service for internal use, but now plans to sell it to other companies in industries such as healthcare, automotive, manufacturing, and retail. Amazon emphasized that its supply chain was never just a function but a “differentiator” from its core shopping experience, “the reason we could offer fast, reliable delivery that no one else could.”

Amazon’s supply chain is complete with warehouses, planes, trucks, and delivery vehicles around the world. It has become America’s largest package carrier by volume, according to ShipMatrix. Additionally, the retail giant has been selling its fulfillment services to companies that list products on its retail marketplace for more than 20 years. This has made it the largest third-party logistics company in the world, so expanding this service to other companies shouldn’t be a daunting task.

Of course, the move will pit Amazon against many of its major logistics providers, including the USPS, DHL Group and others. Third-party logistics services represent a significant portion of the global economy, estimated at more than $1.3 trillion, representing “a very big opportunity,” said Peter Larsen, vice president of Amazon’s ASCS. The Wall Street Journal. Given Amazon’s size, the new service could disrupt the entire industry, including the U.S. Postal Service, which is already in a very precarious financial situation.