Amazon is building on its supply chain

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Amazon remains at the nexus of e-commerce and logistics while constantly innovating, improving and expanding its network.

Amazon's global logistics footprint

The footprint of Amazon's global supply chain is massive and growing larger with time. In the United States, Amazon's sprawling network delivers a range of services, including Amazon Prime Now hubs (located near urban centers), Whole Foods and fresh foods delivery goods. Amazon's operations comprise a host of sortation, delivery and fulfillment stations. Amazon also has nine inbound cross-dock centers within the U.S. Meanwhile, Amazon's supply chain strategy outside the U.S. are predominantly focused on Amazon Prime delivery and fulfillment stations.

Amazon's mastery of the global supply chain

With Amazon's 2018 competition assessment describing companies providing fulfillment and logistics services as competitors, it's clear that the e-commerce giant is pulling out all stops to become a major player in the logistics sector.

Ocean freight

Amazon has not been as aggressive in expanding its ocean freight line as it has its other logistics networks. However, there are signs that things could pick up quickly, particularly with Amazon's recruitment of UTi Worldwide's former chief executive officer to run its logistics program.

Amazon Air

Amazon Air boasts a fleet of 32 Boeing 767-300 jets, and the planned 210-acre airport in Kentucky is expected to support up to 200 flights daily. Amazon Air is currently on track to compete with the 15th largest U.S. passenger fleet by increasing its capacity to a sizable 40-aircraft fleet.

Trucking fleet

Launched in 2005, Amazon's trucking fleet continues to expand rapidly, particularly with the thousands of trailers purchased to move goods between fulfillment centers. While there have been claims that Amazon has only 300 actual power units, there has been aggressive recruitment of such fleets.

Hiring for logistics

One of the strongest indicators that Amazon is making a power play for the logistics industry can be found in its hiring plans. More than 900 jobs (approximately 5 percent) out of the 17,700 full-time vacancies listed on Amazon's website are in the logistics and transportation sector. About half of these jobs are in the U.S., with half based in its Seattle headquarters. The rest are scattered around the 23 countries with Amazon's footprints. A review of the advertised senior vacancies (requiring 4-7 years of logistics experience) indicates that Amazon is heading towards international logistics and cross-border trade, with a side focus on improving courier delivery.

Robotics and drone delivery

No company is better than Amazon at tech-driven efficiency. With more than 45,000 robots at Amazon warehouses, the impact of automation on supply chains is all too clear. Plans are now underway to deliver packages by drone to customer doorsteps within a few years. This will reduce pollution and traffic congestion by taking delivery trucks off the road while reducing the incidence of lost packages. Amazon has demonstrated that the delivery of a stellar customer experience requires taking full control of the supply chain. The evolution of Amazon into a comprehensive global supply chain is no longer a possibility. It has become inevitable.

Amazon's impact on retailers

Customers log onto Amazon's website with the expectation that a few keystrokes will bring almost anything that they desire to their doorsteps with a minimal wait. Amazon offers rapid delivery and options for free shipping, substantially impacting the business models of other retailers. As no other online retailer operates at the same level and scope as Amazon, businesses will likely alter their customer fulfillment and delivery strategies to mirror the Amazon supply chain strategy in order to remain competitive. For retailers with the right internal technological capabilities, physical networks and expertise, improving user experience is the best bet against Amazon's global supply chain. To compete effectively, businesses must leverage robotics process automation (RPA) and digital automation solutions to provide accurate, real-time information to customers about their freight, improve time to market, reduce costs and increase return on investment.

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