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Amazon.com, America’s top e-commerce company, is rapidly but quietly reshaping tradeflows on the transpacific, becoming a discreet top 10 non-vessel-operating common carrier (NVOCC) over the past year and putting the business models of traditional freight forwarders on edge as a hybrid between a logistics provider and a cargo owner. According to data compiled by Steve Ferreira, CEO of New York-headquartered Ocean Audit, Amazon's ocean freight logistics division, AMZD, is moving an average of 1,100 feu each week on the transpacific eastbound for the past 52 weeks, easily ranking the Jeff Bezos firm among the top 10 transpacific NVOCCs. Amazon’s logistics division has its own standard carrier alpha code, AMZD. Using the AMZD code, it’s possible to filter the raw house bill data that AMZD is moving from predominantly mainland China. Typically Amazon buys its own goods from Asia, or has other importers of record send cargo to Amazon's distribution centers. “Amazon.com has about 50,000 feu of import buying power on their own. AMZD has another 50,000 feu of leverage towards a consolidated service contract. This would put Amazon at about 100,000 feu or 200,000 teu,” Ferreira told Splash Extra. They are changing the landscape not like some self-proclaimed digital forwarder putting new paint on an old chair Amazon has made its AMZD program available to smaller size Chinese suppliers and US sellers. The program is dominated by Chinese suppliers taking advantage of the American firm’s Fulfillment By Amazon (FBA) service that provides storage, packaging, and shipping assistance to sellers. With FBA, Amazon provides competitive rates to third-party sellers to ship bulk inventory to Amazon. Amazon stores this inventory, ships the product on demand and also handles all customer services and returns. Moreover, FBA isn’t limited to items sold on Amazon, as sellers can use Amazon’s multi-channel fulfilment option to ship non-Amazon orders to the seller’s customers, and thus avoid operating their own logistics infrastructure. Nick Coverdale, founder of Hong Kong freight booking platform NVO-2-NVO, backed up Ferreira’s data on Amazon. “Amazon is meeting the definition of disruption, taking the goods from a factory to the US consumer by an independent supply chain in container loads not a single parcel,” Coverdale said, adding: “The likes of Amazon are the real threat to forwarders and integrators. They are changing the landscape not like some self-proclaimed digital forwarder putting new paint on an old chair.” Charles Moret from container shipping advisory CTI Consultancy said forwarders should indeed be concerned, as well as the like of UPS, DHL and FedEx as it is likely Amazon’s next move will be into small-parcel shipping since it is a natural fit for their services model. “Amazon’s customer-centric approach, tech and process excellence leadership will be hard to match. In addition, their practice to turn internal tech infrastructure into external product limits complacency and ensures they remain competitive,” Moret said. Lars Jensen, CEO of the recently rebranded container consultancy Vespucci Maritime, said the Amazon NVOCC news was part of the competitive positioning game which has been ongoing for several years. “The traditional forwarders are seeing an increased competitive pressure from multiple fronts,” Jensen told Splash Extra, whether it be from liners developing their own digital tools, the advent of so many digital forwarders or the rise of e-commerce giants such as Amazon. “With the likes of Amazon you have players who are not only in the forwarding space but also have a direct hand in the value of the cargo itself as well as the end-consumer which can be leveraged. I have for years been naming Amazon as a large strategic competitive threat to the forwarders,” Jensen said.

Amazon reshapes transpacific trade flows

Amazon's ocean freight logistics division, AMZD, has entered the top 10 NVOCC list.

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