Amazon Begins to Act as Its Own Freight Broker
Over the past two years Amazon.com Inc. has dabbled in the transportation and logistics industry. But recently, the e-commerce behemoth began to directly broker freight to truck drivers, rather than solely rely upon third-party firms such as C.H. Robinson Worldwide, Transport Topics has learned.
It’s the latest move signaling the company intends to be a player in the transportation and logistics industry even though the amount of freight brokerage appears to be a very small portion of the e-commerce giant’s overall transportation footprint.
Amazon.com registered with the Federal Motor Carrier Safety Administration as a freight broker on March 4, 2016, doing business as Amazon Logistics Inc., according to agency records.
Amazon Logistics first acted as its own freight broker in August 2017, according to a credit report from Transcredit. Amazon Logistics brokered a second load in October and a third in November, although the credit report doesn’t indicate the name of the carriers.
Amazon Logistics also registered with load board operator DAT Solutions on March 30, 2017, according to a profile on the website.
DAT declined to comment for the story, but carriers and brokers told TT that Amazon Logistics has posted fewer than five loads since last October. All the freight was sent from or delivered to Hebron, Ky., where Amazon.com owns six fulfillment centers.
A Truckstop.com spokesman said that Amazon Logistics hasn’t posted on its load board or applied to become an eligible broker.
Nevertheless, it isn’t the first time Amazon.com has dipped its toes into the transportation and logistics industry.
In January 2016, the Federal Maritime Commission granted the e-commerce company’s request to become its own nonvessel operating common carrier and freight forwarder, which allows the retailer to directly negotiate rates and secure capacity with ocean and airfreight carriers.
Satish Jindel, president of SJ Consulting Group, said that, for now, Amazon.com is paying more attention to the last mile.
“When I order something, there’s less chance the reason I didn’t get it on time because something didn’t make it on time from China. It probably happened because UPS, FedEx or the Post Office didn’t handle it correctly,” he said.
However, Jindel believes Amazon.com gradually will control more of its supply chain rather than using third parties.
“Part of what Amazon is doing as an NVOCC, freight forwarder and broker is part of a bigger logistics picture of being everywhere in the supply chain so it can provide the seller the best experience. If Amazon can do it on its own, it can also cut out the margin,” he said.
CompuNet, a second credit reporting agency, listed two nonpayment complaints on file connected with Amazon Logistics, on transactions dating back to May 2016.
TBS Factoring Service purchased invoices from motor carriers on 17 loads transported on behalf of Amazon Logistics, the latest being on Jan. 2, 2018.
Fogg
“Anytime a smaller independent carrier has opportunity to move freight just like a well-established one, it’s a win for them. One of the primary benefits we provide is the ability to do just that, and get paid,” said Jennifer Fogg, president of TBS Factoring Service in Oklahoma City.
Three motor carriers — Trans Carriers Inc., Milan Express Co. and Skinner Transfer Corp. — reported a combined 53 loads with Amazon Logistics between December 2016 and July 2017, with each carrier’s invoices paid in full.
A third credit report from Ansonia Credit Data notes that two customers worked with Amazon Logistics with four entries in the profile dating back to November 2017.
Transcredit gives Amazon Logistics a credit score of 76 (“moderate risk”) on a 100-point scale. Dun & Bradstreet Paydex lists the credit score as 80 (“low risk”). Like a standard credit score, a high number equals less credit risk.
TT purchased both credit reports to determine the scope of the freight brokerage activity.
An Amazon.com spokesman declined to comment for the story.
