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Commentary: Logistics as a lambda function

(Photo credit: Jim Allen/FreightWaves)

One advancement in modern software that is increasing the speed of innovation is the ability to trigger automated functions or processes when certain events happen. Developers use anonymous functions to quickly and easily trigger an event (or series of events) which shortens development cycles because anonymous functions can be reused so programmers don’t have to re-write certain snippets of code each time they want to replicate an aspect of their software.  These functions are often introduced into the code using the keyword “lambda.” Anonymous functions are often referred to as lambdas or lambda abstractions in software development. While anonymous functions have been a feature of programming languages since the late 1950s, recently Amazon is popularizing these functions, now better known as Lambda Functions.

When Amazon set out to build its cloud business in 2006, its mission was simple – to deliver “a highly scalable, reliable and low-latency data storage infrastructure at very low costs.”  Amazon’s approach was even simpler – bundle cloud infrastructure and developer tools to make it easier for companies and entrepreneurs to move their businesses to the cloud, enabling faster development and growth. By separating the components of the cloud (database, computing power, storage) while still offering them bundled together along with developer-friendly tools, Amazon would be able to offer “Amazon Quality” cloud computing capabilities to the masses at a price that was drastically lower than the competition. Amazon’s subsidiary for offering these services is known as AWS, which stands for Amazon Web Services. A keystone of the AWS offering is developer tools like the Lambda Function. 

(Photo credit: Amazon)

Essentially, AWS Lambda allows you to add custom logic to AWS resources such as Amazon S3 buckets and Amazon DynamoDB tables, making it easy to apply computing to data as it enters or moves through the cloud, according to the company’s site.  

In short, by introducing a lambda function to developer code, programmers can trigger routine series of events programmatically. These functions also allow developers to provision resources for a programming function on a pay-per-use basis without having to be concerned about what Amazon storage or computing resources will support it. In layman’s terms, the bedrock of Amazon’s staggering growth strategy in its Cloud Services Business is making complex tasks simple for its customers. This guiding principle is being recreated in its logistics and supply chain businesses right before our eyes.

(Photo credit: Amazon)

Bringing simplicity to a complex space has fueled the growth of the AWS cloud business while the company continues to find ways to innovate in the areas of helping its customers run code in any environment without provisioning or managing servers, while only paying for what they use. Similarly, Fulfillment by Amazon (FBA) touts its ability to help merchants sell their products anywhere without provisioning or managing warehouses or delivery networks, while only paying for what they use. Sound familiar?  

One can’t help but notice the striking similarities of Amazon’s simple approach to dominating massive, complex markets when looking at the AWS Lambda section on the AWS website and FBA on Amazon Logistics’ site.  

Amazon has made it so simple to be an e-commerce company because it has bundled the technology, network and infrastructure necessary to build and operate a business with very little experience or capital. Simply set up an FBA account, build your product list in the system, send Amazon your products and count the dollars! No servers to manage, warehouses to maintain or carriers to manage. See below:

(Image credit: Amazon)

Almost identically, Amazon is and has been providing the developer tools necessary to make it easy for software programmers to create anything they want in a simple, easy to use platform. See below to learn how easy it is to make cool software:

(Image credit: Amazon)

In short, Amazon’s recent investments in logistics infrastructure is identical to the investments the company made in technology infrastructure before its entry into web services in 2006. Amazon is now a full-service transportation enterprise complete with its own truck brokerage, warehousing, non vessel-owning common carrier (NVOCC), airline, final-mile delivery network, retail pick-up location network, technology and logistics management expertise. Every business unit just mentioned is tech-enabled and sits on more cash than any company in the transportation sector. The writing is on the wall and Amazon’s motivation is clear. Amazon is putting all the pieces in place to be able to have a single event trigger a series of events that results in another happy customer receiving a purchase in the fastest, most efficient way possible. Someone clicks “buy” and an item shows up, just like a Lambda Function in programming, only in logistics.


  1. Noble1

    I analyzed Amazon’s price chart . Based on the conclusion of my analysis I figured Jeff Bezos must be getting a little nervous since his net worth is tied to Amazon’s share price value . From my perspective he could potentially lose a little over half his net worth since Amazon’s 2018 peak value . That’s not peanuts even though he’s a Centi-Billionaire . I’m not worried for him since he likely ran some algorithms which most likely suggested that possibility , in my opinion . Perhaps this would also explain why he’s been investing quite aggressively in his business , due to the fact it will eventually pay off once the potential economic “storm” subsides .

    I went back to Amazon’s inception(IPO) on the Nasdaq (historical chart). That’s quite a parabolic curve to say the least since Amazon’s inception .

    I then went to see if there was any news concerning earnings lately . Sure enough earnings were released on October 24 2019 which confirm my analysis , in my opinion . Earnings have weakened .

    Furthermore , if I may , I would like to quote a small part from the earnings release article I read titled :
    “Amazon clobbered after a miss on the bottom line and soft guidance ” , since it relates to what the article above is “advertising” in regards to Amazon .

    “For the past four years, AWS has provided the bulk of Amazon’s operating income, so slowing growth could be a drag on future earnings. The 35% revenue growth rate was the slowest since AWS started disclosing that number in 2015.”

    That being said , my analysis is highly speculative and may be off by a “leg” . It’s simply being expressed for entertaining purposes .

    In my humble opinion …………

  2. Noble1

    Amazon is truly nothing short from amazing . The ideas , the way of doing business , their services etc , WOW ! GENIUS !

    This is something a “truck driver alliance Co-Op” should create and own , an “amazon” ! You couldn’t ask for a better “blueprint” and it WORKS !

    Bezos brought his Wall Street experience into creating amazon and he’s taking the market by storm bar none . He worked at D.E. Shaw !

    ” D. E. Shaw & Co., L.P. is a multinational investment management firm founded in 1988 by David E. Shaw and based in New York City. The company is known for developing complicated mathematical models and sophisticated computer programs to exploit anomalies in the market.] In 2018, Institutional Investor reported that among hedge funds, D. E. Shaw & Co. had delivered the fifth-highest returns in the world since its inception.”

    Isn’t that what Amazon has done and is doing ? YOU BET ! It’s after he left his job at D.E.Shaw that he started Amazon IN HIS GARAGE !

    Use Amazon & COPY THEM ! Then improve from there .

    In my humble opinion ………..

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Charley Dehoney

Charley Dehoney is a growth-focused executive, consultant, advisor and investor, with more than 15 years of experience at the intersection of transportation technology. He's helped create revenue systems that have supported hundreds of millions of dollars in growth for the businesses he's helped build. Dehoney is currently serving as CEO of Manning's Truck Brokerage, a 50-year-old, private equity-backed logistics company. He lives in Omaha, Nebraska with his beautiful wife and three strapping young sons.