Amazon aims to turn its shipping network into the next AWS
▼ Summary
– Amazon is launching Amazon Supply Chain Services (ASCS) to offer freight, distribution, fulfillment, and parcel shipping to outside businesses, competing with DHL, UPS, and FedEx.
– ASCS extends Amazon’s existing Supply Chain service, allowing companies in industries like automotive, healthcare, and apparel to ship products through Amazon’s delivery network.
– Businesses using ASCS can store inventory at Amazon’s fulfillment centers and use its fleet of trucks, aircraft, and delivery vehicles.
– Amazon aims to profit from other companies paying to use its fulfillment network, similar to how it offers web infrastructure to third parties.
– The service targets major clients including Procter & Gamble, 3M, Lands’ End, and American Eagle Outfitters.
Amazon is quietly positioning its sprawling logistics operation to become the next major profit engine, much like AWS transformed cloud computing. The company’s new Amazon Supply Chain Services (ASCS) now opens its shipping network to any business, not just those selling on its marketplace. This move directly challenges established carriers such as DHL, UPS, and FedEx by offering freight, distribution, fulfillment, and parcel delivery to companies of all sizes. Early adopters include Procter & Gamble, 3M, Lands’ End, and American Eagle Outfitters.
The logic behind ASCS mirrors the playbook Amazon used with AWS nearly two decades ago. In 2006, the e-commerce giant began renting out its internal web infrastructure to third parties, turning a cost center into a billion-dollar business. Now, Amazon is betting that other companies will pay to tap into its vast fulfillment network, which the company has spent years refining. That network already reduced Amazon’s dependence on the US Postal Service, FedEx, and UPS. In 2023, Amazon launched an earlier Supply Chain service that let businesses ship products directly from factories. ASCS expands that vision dramatically.
Under the new service, companies in industries ranging from automotive and healthcare to electronics, apparel, and food can store inventory at Amazon’s global fulfillment centers. They can also leverage Amazon’s fleet of trucks, aircraft, and delivery vans to move products from storage to customers’ doorsteps. “With the launch of ASCS, we’re confident we can give any other business access to the same cost efficiency, reliability, and speed that we’ve built for Amazon customers,” said Peter Larsen, vice president of ASCS, in the announcement.
In short, Amazon is no longer just a retailer that happens to deliver. It is becoming a logistics provider that happens to sell things, too.
(Source: The Verge)
