In an effort to reduce shipping costs globally, Amazon.com Inc. is entering the freight forwarding business. After registering with the Federal Maritime Commission to arrange ocean cargo in November 2015 and leasing cargo planes in March, they are now currently looking to hire trucking fleets and license technology that can plan shipping routes among their trucks, planes and ships to reduce the time and cost involved in package delivery and possibly open new revenue streams in a freight forwarding market previously controlled by other multinationals.
Expanding their hold in the supply chain, Amazon looks capable of branching deep into Asia to handle the entire flow of goods from small and medium-sized shippers with cargo destined for Amazon’s distribution centers. Purchasing or licensing existing software that freight forwarders use is advantageous considering the market is packed with tried and true technology. If suppliers are outsourcing production, Amazon wants them to outsource their complete supply chain.
If Amazon finds an adequate freight-forwarding platform, they can push a higher volume of cargo into its new freight-forwarding branch and compound the value of services offered. Controlling the platform of sales and the position of shipping would lower costs on behalf of the sellers and secure any gaps in service, effectively reducing prices.