Amazon has obtained an ocean shipping licence in China, as the company expands its reach into logistics operations around the world.
The new licence allows Amazon to buy and sell space on vessels, a potential step towards providing large-scale shipping services to companies that sell on Amazon.com.
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“This could allow them to go direct to the factories in China to sell to consumers in the United States,” said Ryan Petersen, chief executive of Flexport, a US-based freight forwarding company.
“It fits so naturally with their network,” he added. “They already do this beautiful logistics network in the US, why wouldn’t you want to extend that internationally?”
The Seattle-based technology company has been investing heavily in logistics, launching one-hour delivery in more than 20 cities last year and also testing an air cargo shipping programme in the US.
Amazon, which loses about $1bn per quarter on shipping costs, has been expanding its reach across the logistics chain, particularly in the US. Last year it purchased its first fleet of Amazon-branded truck trailers to help ferry goods between warehouses. The company also started running a pilot programme for air cargo operations out of Wilmington, Ohio, according to analysts.
Big retail companies in the US such as Walmart typically buy space directly from shipping lines, making Amazon the only major US retailer that has taken the unusual step of getting its own licence.
Amazon’s ocean shipping volume is less than a tenth of Walmart’s, according to people familiar with the matter. Walmart ships only goods that it has already purchased in China, whereas Amazon’s licence will allow it to sell shipping space to third parties if it wishes, as well as shipping its own goods.
The licence, held by Amazon China, allows it to buy space from vessel owners and sell it to the public. It was registered with US authorities in November, and went unnoticed until it was spotted in an online database on Thursday by Flexport.
I haven’t seen their forays into transportation as being a business they want to provide for others, as much as a way to secure capacity for their own network
- Peter Tirschwell, IHS Maritime
However, analysts questioned whether Amazon would use the licence to provide shipping services for third parties. “I haven’t seen their forays into transportation as being a business they want to provide for others, as much as a way to secure capacity for their own network,” said Peter Tirschwell, senior director at IHS Maritime, citing Amazon’s trucking and air cargo programmes as examples.
He added that selling shipping space was “not a growth business, and not a profitable business”.
A spokeswoman for the US Federal Maritime Commission said Amazon China’s registration papers were submitted on November 9. The company is one of more than 1,300 foreign-registered companies with a similar licence, technically known as a non-vessel operating common carrier licence.
Amazon did not respond to a request for comment.
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