Supply Chain

Amazon Expands And Strengthens Logistics Operations In China To Cut Costs

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Amazon is expanding its logistics operations in China as part of efforts to control the cost of shipping, in a move that some analysts say could help position it to offer shipping services, and compete with likes of DHL and UPS.

The Seattle-based company has been under pressure to drive down its shipping costs, which rose by 37 per cent in last quarter compared with the previous year.

Amazon’s plans in China, outlined in filings there and reported on by Reuters, include handling cargo and customs for goods headed to ports in Japan, Europe and the United States.

Last year, Amazon registered its Chinese subsidiary, Beijing Century Joyo Courier Service, as a freight forwarder, which is a broker that doesn't own ships but handles customs and documentation, with China's transport ministry. This means it can now export cargo out of the country.

According to Reuters, it is expected that Amazon will use this new freight forwarder license to make it easier for Chinese merchants and manufacturers to send goods to major hubs where Amazon has warehouses that can then ship goods to customers.

Merchants and manufacturers would only have to deal with Amazon, rather than multiple companies, for everything from trucking, warehousing and shipping, as it would handle paperwork and even select shipping lines to transport goods.

Analysts have also noted that Amazon would be able to cut shipping costs by bundling products from smaller companies to fill up containers.

© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Jenny Whelan. To subscribe to ESM: The European Supermarket Magazine, click here.

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