Amazon opens up its logistics network to other businesses in new growth push

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May 4 : Amazon.com is giving other businesses access to its supply chain network that has powered the e-commerce behemoth's operations for decades, pitting it directly against logistics heavyweights such as UPS and FedEx.

The tech giant's "Amazon Supply Chain Services" will allow companies across industries, such as retail, healthcare and manufacturing, to use its supply chain network to move, store and deliver everything from raw materials to final products.

By opening up the service that has also supported thousands of independent third-party sellers worldwide, Amazon is tapping into a new growth opportunity for its e-commerce unit.

Its fleet of more than 100 cargo planes, and a vast network of warehouses and sorting hubs could make Amazon a key player in an industry long dominated by FedEx and UPS, potentially intensifying competition on pricing and speed.

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Shares of FedEx and UPS fell 1.8 per cent and 1.5 per cent, respectively, in premarket trading.

Amazon also offers distribution, fulfillment, and parcel shipping services, allowing companies to take advantage of its speedy two-to-five-day delivery timelines, and warehousing and inventory forecasting capabilities.

Companies can use these solutions across all their sales channels, including their own website, social media channels, and physical stores, Amazon said.

Amazon said consumer goods major Procter & Gamble, industrial heavyweight 3M and apparel firm American Eagle Outfitters have already signed up for the supply chain services.

The move also takes a leaf out of Amazon's cloud computing unit's playbook - Amazon Web Services was launched in 2006 to revamp the company's own IT infrastructure, and it later evolved into the world's biggest cloud services provider.

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