After reducing its dependency on the US Postal Service and other carriers, Amazon is opening up its own logistics and delivery services to other businesses. “Today, Amazon is announcing Amazon Supply Chain Services (ASCS), opening its full portfolio of freight, distribution, fulfillment, and parcel shipping capabilities to businesses of all types and sizes, not only Amazon sellers,” the company wrote in a press release.
Amazon is launching the new service with a few major businesses including Procter & Gamble, 3M, Lands’ End and American Eagle Outfitters Inc. For 3M and P&G, Amazon’s freight services will ship products from manufacturing sites to distribution networks, and fulfill orders directly to customers for Lands’ End and American Eagle.
Much like Amazon Web Services (AWS), Amazon built its logistics service for internal use but now plans to sell it to other companies across industries including healthcare, automotive, manufacturing and retail. Amazon noted that its supply chain was never just a function but a “differentiator” to its core shopping experience, “the reason we could offer fast, dependable delivery that nobody else could.”
Amazon’s supply chain is comprehensive with warehouses, planes, trucks and delivery vehicles around the world. It has become America’s largest parcel carrier by volume, according to ShipMatrix. In addition, the retail giant has been selling its fulfillment services to companies that list goods on its retail marketplace for over 20 years. That has made it the world’s largest third-party logistics company, so expanding that service to other businesses shouldn’t be a big stretch.
The move will, of course, pit Amazon against many of its key logistics suppliers including the USPS, DHL Group and others. Third-party logistics services are a huge part of the global economy estimated at more than $1.3 trillion representing “a very large opportunity,” Amazon’s ASCS VP Peter Larsen told The Wall Street Journal. Given Amazon’s scale, the new service could disrupt the entire industry, including the US Postal Service that’s already on very shaky financial ground.