It’s my firm belief that given Amazon’s current trajectory we may all end up working for them, and sooner than we think if we don’t pay attention.
Amazon Are Big
Amazon are big. Very big. They account for 26% of the United Kingdom warehouse take up. They are getting bigger. This holiday season they are hiring 100,000 temporary workers – 25% more than last year.
According to Wired we also need to get used to Amazon being a profitable company because for the past two quarters they have posted significant profits. In addition
“You may need to change the way you think about Amazon. It’s no longer just an e-commerce giant. It’s the world’s largest retailer. Period. And at the same time, it runs the world’s most successful cloud computing business.”
Amazon Think Outside the Box
They constantly think outside the box (pun intended) in their relentless pursuit to increase sales, drive down costs, efficiently scale their operation and deliver products to customers when, where and however they want them. Delivery by newspaper trucks and drone delivery are two such examples of thinking outside the box.
Amazon Are the Big Disruptor
Amazon are “the big disruptor” in the ecommerce space. But what goes hand in glove with selling stuff? Delivering stuff!
Amazon are currently earning their “big disruptor” moniker in the logistics space and as logistics professionals we need to play very close attention. For a company as big and forward thinking as Amazon it only takes one small step from being “the big disruptor” to becoming “the new sheriff in town.”
Amazon Freight Services
This very scenario has been postulated by RW Baird and published in The Loadstar:
Freight services could be the next step for internet giant Amazon’s ever-expanding commercial empire.
“We believe Amazon can leverage the vast and expanding technology and fulfilment infrastructure supporting their own network of distribution, local sortation and data centers to offer logistical and delivery services to third parties,” it said.
What’s stopping them? With Amazon Prime Now, Amazon Fresh and Amazon Flex they have entered the parcel delivery space. Their huge cloud computing infrastructure lends itself well to providing a global contract logistics service. They understand the complexities of the logistics industry because they live and breathe them daily. They think outside the box and they have capital. In fact according to RW Baird:
“If Amazon won a 1% market share in each of the three logistics categories – annual revenues of $800m in US domestic parcel deliveries, $1.7bn in freight forwarding and $2.5bn in contract logistics – Amazon Transport and Logistics could earn the company $5bn a year.”
So in answer to my own question I have absolutely no idea what is stopping them because they could also earn $5bn dollars in the first year!
It’s interesting to note that a company so well positioned to disrupt the logistics industry actually comes from outside the industry. I’m not convinced that fresh new ideas and energy can only come from outside of the industry. Jeff Immelt is building the Industrial Internet and is a huge player in transportation and logistics.
Logistics Professionals Need to Pay Attention
However my point is that the times they are a changin’. Some think that change will just evolve. I‘m not so sure. There are specific technologies, processes and models that will evolve of course, but there will also be some that arrive big, fast and hard.
As logistics professionals we need to pay attention now more than ever before and be well prepared to adapt and leverage new technologies into new opportunities. If we don’t we’ll all be working for Amazon sooner than we think!