“Global Supply Chain by Amazon”: Disintermediation Will be the Name of the Game

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Regarding Amazon’s plans to compete with Fedex, UPS, DHL in global logistics here are some more tidbits from Bloomberg:

“Sellers will no longer book with DHL, UPS or Fedex but will book directly with Amazon,” the 2013 report said. “The ease and transparency of this disintermediation will be revolutionary and sellers will flock to FBA given the competitive pricing.” Amazon will partner with third-party carriers to build the global enterprise and then gradually squeeze them out once the business reaches sufficient volume and Amazon learns enough to run it on its own, the documents said. If the logistics business takes hold, financial services could follow, with Amazon giving loans to merchants, processing international payments and consulting its network of sellers on customs and tax matters.

Amazon is still (in the latest earnings call) talking about just adding additional capacity, which is true, but it is of course in the long run about replacement and disintermediation of its main logistics partners (which are in turn a main cost point for Amazon).

The “additional capacity” will be a great narrative for Amazon and the logistics industry to tell itself that dramatic changes might not come:

The best lie has a grain of truth to it.

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