Amazon Evolving: Manufacturers and Logistics Providers Take Notice

Amazon is largely known for their e-commerce presence but lately they’ve been looking to take the business one step further. Recently the company showed off their plans for a floating distribution center, with both the manufacturing and supply chain community expected that to be a sign of things to come. Moving closer to a full service distribution and logistics provider, they made another announcement that would solidify that fact.

On January 31st, 2017 the company announced it would be creating new jobs and investing heavily in the Kentucky economy. Plans include the construction of a centralized air hub to support the growing fleet of Prime Air cargo planes. The company expects to create 2,000 new jobs but businesses everywhere wonder what this will mean for the company’s future.

Amazon has been breaking barriers for nearly 20 years, absolutely dominating the e-commerce industry. Now, as they take steps to secure their footing in the air cargo industry they’ve been beginning to look more like a logistics provider as well as an e-commerce giant. The company is known for their quick and easy delivery service, utilizing the latest technology to ensure customers receive their goods. Manufacturers are starting to wonder if these advantages will be able to work for their products.

“As we considered places for the long-term home for our air hub operations, Hebron quickly rose to the top of the list with a large, skilled workforce, centralized location with great connectivity to our nearby fulfillment locations, and an excellent quality of living for employees.” said Dave Clark, Amazon Senior Vice President of Worldwide Operations when he was asked why Kentucky was his choice for this new facility. He continued on, stating “we feel strongly that with these qualities as a place to do business, our investments will support Amazon and customers well into the future,”. http://bit.ly/2l1lNq2

There are two sides to this coin, manufacturers and other businesses are excited about the possibility of Amazon becoming a full service logistics provider. However, 3PL’s and other logistics providers are worried about how Amazon will disrupt the industry. With Amazon coming out with new services and technologies to help them deliver cargo to their customers, the logistics industry waits with bated breath for the company’s next move. Even though Amazon has stated that they are not interested in becoming their own logistics provider, the company’s actions show a different story.

Below is a video from IEN.com offering some more insight into Amazon’s latest announcement.

Sources:
http://www.ien.com/supply-chain/video/20850978/amazons-15b-air-hub-could-make-ups-fedex-new-competitors
http://www.supplychain247.com/article/amazon_new_air_cargo_hub_in_kentucky