The move is raising concerns among freight operators that they may end up competing for business with the e-commerce giant that many also count as a significant customer
An Amazon Prime truck traveled on Interstate 35 in Waco, Texas, last August. Photo: Irwin Thompson/The Dallas Morning News/Associated Press By Jennifer Smith April 30, 2019 4:41 p.m. ET Amazon.com Inc. is pushing deeper into logistics as it tries to tamp down transportation costs ahead of a pricey push into one-day shipping, raising potential concerns for freight operators that may end up competing for business with the e-commerce giant that many count as a significant customer.
Amazon is offering beta service for truckload shipments in Connecticut, Maryland, New Jersey, New York and Pennsylvania through its Amazon Logistics arm. It also provides instant rate quotes through an online portal, freight.amazon.com, saying users can “tap into the scale of Amazon as we extend our carrier network to give you best-in-class service at great rates.”
Opening up the platform gives Amazon more leverage with carriers on negotiating rates, said Armstrong & Associates President Evan Armstrong. “You get synergies by allowing shippers to come on to your platform, and you increase your network scale and your purchasing power with trucking companies,” he said.
Sanford C. Bernstein & Co. analyst David Vernon said in a research note that traditional freight companies face a bigger competitive threat, however, if Amazon acts as a “not-for-profit truck brokerage,” offering money-losing rates for capacity it buys on the spot market, rather than using the platform to sell excess capacity “it has bought to run its supply chain.”
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