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Amazon is building a shipping business

Last Friday, Amazon gave one of the strongest hints yet, that it's actually building a shipping business. In its securities filing Amazon identified “companies that provide fulfilment and logistics services for themselves or for third parties, whether online or offline” as competition. And it referred to itself as a “transportation service provider”.

Wall Street Journal claims this is the first time Amazon has ever used such language in its 10-K annual report.

Amazon has a large network of trucks, warehouses and logistics services that it has built to support its business. However, now it is considering opening up that business to other retailers. Market analysts agree this could be a very lucrative move.

Colin Sebastian, a Baird Equity Research analyst, estimates the market is worth at least $400 billion (£277bn).

“We continue to expect Amazon to add logistics primarily to meet its own growth, but over time, and in incremental fashion, we believe it is likely that Amazon will offer this expertise to third parties to help subsidize those costs,” Mr. Sebastian said.

Amazon Chief Financial Officer Brian Olsavsky downplayed the importance of this information, saying that Amazon is not trying to compete with other shipping businesses (some of which are its partners), but instead, trying to complement them.

“In order to properly serve our customers at peak, we’ve needed to add more of our own logistics to supplement our existing partners,” he said. “That’s not meant to replace them, and those carriers are no longer able to handle all of our capacity that we need at peak. They have been, and continue to be great partners, and we look forward to working with them in the future.”

Sead Fadilpašić

Sead is a freelance journalist with more than 15 years of experience in writing various types of content, from blogs, whitepapers, and reviews to ebooks, and many more, across sites including Al Jazeera Balkans, TechRadar Pro, IT Pro Portal, and CryptoNews.