Dive Brief:
- Amazon will soon be offering Chinese vendors the option to transport their goods as air cargo via international flight, The Wall Street Journal reported.
- The e-commerce giant recently began offering ocean transport in China; with the addition of air cargo availability, the company is positioning itself as a more direct competitor to established logistics companies such as UPS and FedEx.
- Customers will be able to book and reserve space through an easy-access technology system, causing disruption among more traditional providers used to telephone or even fax bookings.
Dive Insight:
Amazon is once again extending its reach as a freight forwarder, only this time it is flying directly into its main competitor's turf.
Amazon's move to equip Chinese vendors with air cargo services shows the company's drive to become a global freight forwarder, rather than just an e-commerce giant. Natural comparisons emerge, then, between its own expansion model and its Chinese rival, Alibaba, who has continued to expand its own reach into U.S. markets.
However, the two work in vastly different ways. Alibaba's interest is in developing a horizontal supply chain ecosystem where companies are able to find each other to create business partnerships. Amazon by contrast is aggressively vertical, as evidenced by its latest overseas air cargo endeavor.
In fact, in theory Alibaba could allow its customers to choose Amazon as a logistics provider. If Alibaba seeks to provide service rather than control the logistics chain, it would not be a far step. The company recently partnered with Maersk Line, for example, to offer reserved sea transport cargo space.
Regardless, Amazon's global logistics ambitions become more clear each day. Whether the company will succeed in competing with UPS, FedEx and other global providers is still unknown, but its expansions are far from subtle.
