Amazon launches supply chain services for outside businesses
Updated
Updated · The Wall Street Journal · May 4
Amazon launches supply chain services for outside businesses
15 articles · Updated · The Wall Street Journal · May 4
The new unit lets companies, including non-marketplace sellers, buy fulfillment, ocean and air freight, and trucking through one centralized offering.
The move formally expands Amazon into full third-party logistics, competing with DHL, DSV and Kuehne + Nagel in a market estimated above $1.3tn.
Pilot customers include Procter & Gamble, 3M and Lands' End, while Amazon says safeguards prevent customer logistics data being used for its retail marketplace.
Is Amazon's new service creating an 'AWS moment' for shipping giants like FedEx and UPS?
By controlling both goods and data, is Amazon building an unchallengeable monopoly over global commerce?
In 2024, Amazon launched Amazon Supply Chain Services (ASCS), expanding its logistics beyond traditional fulfillment to offer integrated freight, storage, and parcel delivery across 19 countries. Central to ASCS is the enhanced Multi-Channel Fulfillment (MCF), which boosted sellers' sales by 19%, reduced out-of-stock rates by 19%, and improved inventory turnover by 12%. Powered by AI, ASCS streamlines customs clearance and inventory forecasting, driving efficiency gains for sellers like Unilever. However, adopting ASCS requires sellers to adapt to complex systems and accept reduced control over their supply chains. This expansion creates high barriers for competitors, prompting Walmart to respond with its own logistics services, while regulators scrutinize Amazon's growing market power and seller dependency.