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News

Amazon cements its place as a supply chain leader amid uncertainty

Retail giant holds onto first place FreightTech 25 title despite pandemic woes

Amazon (NASDAQ: AMZN) secured first place in the 2021 FreightTech 25 — a position it has held for the past three years. The Seattle-based disruptor — known most widely for its lightning-fast shipping — seems to have a hand in just about every part of the logistics industry at this point.

It is not surprising to see this undefeated champ rise to the top again, but this year proved more daunting than most for the retail giant. Amazon — a company with an entire industry phenomenon named after it — took a hit during the early days of the pandemic. Customers could no longer count on guaranteed two-day shipping, stock was running low and the company’s famed Prime Day was moved from June to October. As lockdowns began to lift and consumer buying habits reverted to something resembling normalcy midyear, however, Amazon recovered its renowned speed — a testament to the company’s existing infrastructure and demonstrated commitment to innovation.

Amazon has been building out its in-house transport services for years now, decreasing its reliance on other carriers and increasing its own presence in the market. During the company’s most recent earnings call, Amazon reported pouring billions of dollars into its transport network while ramping up capacity for peak season. Over half of the company’s capital expenditures went toward transport in the first nine months of 2020, according to the earnings report.

“Amazon self-handles about two-thirds of its deliveries, the highest ever in its history, according to estimates from consultancy ShipMatrix,” FreightWaves’ Mark Solomon reported in late October. “Amazon’s third-quarter shipping costs totaled more than $15 billion, a 57% year-over-year increase.”

In the past month alone, the company has expanded its footprint significantly through the opening of Amazon Air’s first European hub and the expansion of its in-garage delivery offering across the U.S. 

Amazon’s new European air hub is located at Leipzig/Halle airport in central Germany. The operation is small, but gives Amazon footing to begin shifting shipments away from giants like DHL, FedEx and UPS. The company currently has planes running between Germany and New Orleans in its constant effort to speed up delivery times. 

The company’s in-garage delivery service, Key by Amazon, expanded to include five U.S. markets earlier this month. The service is currently offered in Seattle, San Francisco, Chicago, Dallas and Los Angeles. The service is offered primarily for grocery orders placed via Amazon Fresh or Whole Foods Market. The new, flashy offering is intended to offer higher levels of convenience while providing a contactless option and cutting down deliveries’ vulnerability to porch pirates. 

Beyond in-garage delivery, Key by Amazon is notable because it gives the company the ability to deliver packages inside customers’ homes and vehicles when no one is available to receive them. Amazon quite literally takes delivery a step further than its competitors.

These innovations — combined with the company’s dramatic build-out of delivery stations and general tendency toward innovation — have positioned Amazon as a leader in the logistics space. The company rolls out new offerings at breakneck speed, often leaving its competitors in a frenzy as they try to keep pace with the giant.

Ashley Coker, Associate Editor

Ashley is interested in everything that moves, especially trucks and planes. She covers air cargo, trucking and sponsored content. She studied journalism at Middle Tennessee State University and worked as an editor and reporter at two daily newspapers before joining FreightWaves. Ashley spends her free time at the dog park with her beagle, Ruth, or scouring the internet for last minute flight deals.

One Comment

  1. Amazon needs to improve treatment of truck contractors and delivery drivers or subcontractors. The Fed gov needs to provide minimum freight and delivery drivers pay both by the hour and by the delivery. Also all truck and delivery drivers should have medical insurance paid for by the employer or who they are subcontracted to.