What does Amazon’s e-commerce dominance mean for logistics service providers?

Logistics Service Providers have profited from aligning themselves with the e-commerce giant’s rapid growth.

Logistics in the News

State of Logistics 2016: Pursue mutual benefit
Q&A: Abtin Hamidi, chief vice president and co-founder of CargoChief
Cass and Avondale data highlights declining truckload and intermodal rates
Peak Season dynamics continue to see changes
Improving Packaging: The Cost of Shipping Air is Going Up
More Logistics News

Logistics Resource

Improving Packaging: The Cost of Shipping Air is Going Up
Retailers and manufacturers that insist on using inefficient and sloppy packaging methods—oversized boxes, inefficient packaging, poorly constructed palletized contents—are paying for their mistakes in sharply higher freight rates.
All Resources
By ·

From its inception as an online book retailer, to being the world’s biggest e-commerce company, Amazon’s influence and control over the sector has been almost absolute. Logistics Service Providers [LSPs] have profited from aligning themselves with the e-commerce giant’s rapid growth. However, as both Amazon and customers evolve, LSPs risk being left on the shelf.

One of the key findings of Ti’s newly-released report, Global e-commerce Logistics 2016, is that as consumers continue to place their items in Amazon’s basket in ever-increasing numbers, LSPs cannot afford to cut ties with the e-commerce giant without losing significant volumes.

The report presents an in-depth analysis of the intricate and dynamic e-commerce sector, on a global scale. It also provides overviews and analysis of some of the key factors shaping the market, including consumer preferences and expectations, as well as new technologies and how they are being received.

Ti analysts have reviewed not only the market as a whole, but also the individual supply chain models of both global and regional e-tailers. Companies profiled include those operating purely online, as well as those with multi- and omni-channel business models. They include Alibaba, Amazon, CNOVA, eBay, JD.com, John Lewis, Tesco and Walmart. In addition, the report includes an overview of the activities and strategies of logistics providers within the e-commerce market, including Clipper Logistics, DPDHL, Japan Post, SEKO and XPO Logistics.

In order to find an edge in an increasingly crowded market place, the role of technology will continue to hold significant sway. New ways for consumers to track and interact with deliveries, an increase in omni-channel adoption amongst retailers, the growth of wearable warehouse technology and growing fears about cyber-attacks are just a few of the ways in which technology will change the landscape of the sector dramatically in the next few years. Those LSPs who are able to work with retailers to create the most efficient and cost effective services will be the ones who prosper. Others will find themselves shelved.

Amazon continues to make headlines over its moves to own and control more of its supply chain. For logistics providers, highlighting their involvement in the existing process is vital to ensuring their survival independent of Amazon. As retailers continue to look for competitive advantages across the whole of the supply chain, those LSPs who can trade on their success as part of the Amazon delivery machine will be best placed to survive a fierce market which continues to grow in intensity.

According to Ti Economist Global: “Any provider that establishes a strong reputation in e-commerce logistics and finds a formula which yields a consistently decent margin is set for years of success


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

Amazon · Global · Logistics · All Topics
Latest Whitepaper
Outsourcing the Indirect Supply Chain
This in-depth whitepaper takes you through the journey that Smith & Nephew - a global research, development and manufacturing company of medical devices and products - underwent when initially looking for a provider to manage their tool cribs and eventually decided on an end-to-end supply chain management firm. Outsourcing white papers, SDI medical device manufacturing
Download Today!
From the July 2016 Issue
While it’s currently a shippers market, the authors of this year’s report contend that we’ve entered a “period of transition” that will usher in a realignment of capacity, lower inventories, economic growth and “moderately higher” rates. It’s time to tighten the ties that bind.
2016 State of Logistics: Third-party logistics
2016 State of Logistics: Ocean freight
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo