Trade Compliance

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Amazon Shaking Up Supply Chain Distribution

Posted October 16, 2014

News today that Amazon has the lion’s share of the online retail market in Canada, with $1.5 billion in e-commerce sales in 2013 – more than the next seven leading retailers combined – coincides with two trade industry articles focused on very different aspects Amazon’s supply chain challenges.
Amazon Kindle
Supply Chain Digital’s Sam Jermy looks at Amazon’s shift away from dependence on UPS/FedEx to a more flexible and diverse network of logistics providers and also examines some of the recent innovations and improvements to Amazon’s cross-border network that have slashed delivery times in half from its European fulfillment centers. One notable example cited is utilizing delivery lockers (such as those used domestically in places like 7-Eleven stores) in the London Underground to access a customer base making 11 million journeys per day. This, Jermy states “is classic Bezos – tapping into a relatively unheard of practice and capitalising on the business opportunity to stay ahead of the industry curve.”

Innovative delivery methods aren’t the only way Amazon seeks to change the rules of the game. Jermy notes Amazon’s sometimes cheeky attitude towards government regulation, as in the case of circumventing a bothersome French law preventing e-shops from shipping bargain books for free. Amazon deftly side-stepped this obstacle by simply charging its home delivery customers in that country a nominal one euro cent for such books.

The other article in Logistics Management is an interview with Maria Haggerty, an e-commerce logistics expert on Amazon’s somewhat surprising “Back to the Future” move with the construction of a new brick and mortar retail store in midtown Manhattan that’s set to open for the upcoming holiday season. Once complete, the facility will likely include a showcase for Amazon’s gadgets and contain a selection of inventory to accommodate local same-day delivery and shoppers who want to pick up products bought online.  “Amazon is always opening up the conversation for the global supply chain to find a way to send consumers their online orders faster and at a lower cost,” Haggerty says. “This move is the latest endeavor to do that.”