Amazon's ambitious plans to disrupt logistics and distribution by competing with shipping mainstays FedEx and UPS is something to watch this year, according to MDM's Top Trends for 2016.
The retail giant is considering a crowdsourced delivery system where people sign up to make deliveries the same way they sign up to shuttle passengers through Uber or Lyft. On a much broader scale, the company is in talks to buy a fleet of Boeing 767 cargo jets for package delivery, according to reports.
And, according to a Bloomberg report this morning, Amazon plans to unveil a venture called “Global Supply Chain by Amazon” in 2016. Bloomberg News said it reviewed Amazon documents about the venture that reveal a "far bolder plan" than a network that would merely supplement delivery capabilities, as had previously been reported.
"The new business will locate Amazon at the center of a logistics industry that involves not just shippers like FedEx and UPS but also legions of middlemen who handle cargo and paperwork associated with transnational trade," according to the report. "Amazon wants to bypass these brokers, amassing inventory from thousands of merchants around the world and then buying space on trucks, planes and ships at reduced rates.
"The ambitious strategy promises to turn FedEx and UPS into Amazon rivals, but also will pit the Seattle giant against Chinese counterpart Alibaba Group Holding Ltd. Both companies are vying for dominance of the rapidly growing cross-border e-commerce market … ."
Amazon's moves are just one supply chain issue distributors will face in 2016. The opening of the expanded Panama Canal will affect cargo movements into and around the U.S. And the ongoing truck driver shortage will force transportation companies to raise wages for truckers, which will drive up costs for companies across the supply chain.
Read more about Amazon's supply chain disruption, logistics concerns and other distribution issues to watch for this year in Top Trends for 2016.
