Amazon has got the ocean shipping license which would let it ship from China to the United States
The American e-commerce giant has attained an ocean shipping license in China, as it extends its reach to the logistics operations across the globe. The newly issued license permits the online trading giant to sell and purchase space on vessels, a potential measure towards the provision of large scale shipping facilities to enterprises that sell through the organization’s online marketplace.
“This could allow them to go direct to the factories in China to sell to consumers in the United States, It fits so naturally with their network,” stated CEO of American freight forwarding organization Ryan Petersen.
Amazon has heavily invested in logistics, introducing 1 hour delivery in over 20 cities in 2015 and conducting a test of an air cargo shipping program in the United States.
The electronic commerce company, which has lost around $1 billion per quarter on costs of shipping, has expanded its reach across the logistical system, especially in China.
In 2015, it procured its first fleet of Amazon-branded truck trailers to play a role in helping transport items between warehouses. Analysts have revealed that the enterprise also began to run a pilot program for air cargo operations from Wilmington, Ohio.
Retail giants in the USA like Walmart usually purchase space from shipping service providers, making Amazon the one and only main American retailer that took the unusual measure of attain its own license.
People aware of the matter have revealed that ocean shipping volume of the company is lesser than 10% of that of Walmart. Walmart only does shipping of the goods which have already been bought by it in the People’s Republic of China, while the license of Amazon would permit it to sell shipping area to outside parties it it’s wishing to do so and ship its own items as well.
The license which Amazon China is holding help its purchase area from owners of vessels and sell it to the masses. Its registration was done with the American authorities in November, and was not noticed until it was found in an electronic database yesterday by Flexport.
Nevertheless, analysts have questioned whether the online retailer will employ the license to offer shipping facilities for outside parties.
“I haven’t seen their forays into transportation as being a business they want to provide for others, as much as a way to secure capacity for their own network,” stated official of IHS Maritime, Peter Tirschwell , referring to the air cargo programs and trucking of Amazon as examples.
He also stated that selling shipping area was “not a growth business, and not a profitable business”.
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