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Amazon new forwarding arm expands logistics reach in and from China
US E-COMMERCE giant Amazon is expanding its logistics operations in China to control the rising cost of shipping billions of packages, Reuters reports.
As a forwarder, Amazon now plans to handle cargo and customs brokerage for goods headed for Japan, Europe and the United States to be lodged in its warehouses that can ship goods to customers.
In documents submitted to the Shanghai Shipping Exchange, the company said its forwarding unit, Beijing Century Joyo, plans to charge customers between US$530 and $2,530 to transport an FEU from Shanghai to Hamburg.
The rate is comparable to those charged by other forwarders, and the wide range gives it flexibility to adjust its prices based on volume. Amazon would then be able to compete with United Parcel Service and DHL.
This appears to be a similar move to Amazon's fastest growing unit, its cloud computing unit Amazon Web Services, which is now hosts data for other companies.
Seattle-based Amazon faces increasing pressure to reduce shipping costs, which were up 37 per cent in the last quarter compared to the same period a year ago.
Amazon's Chinese subsidiary also made a similar application with the US Federal Maritime Commission in November.
Brian Xue, vice president of operations for Amazon in China, signed the government filings. Mr Xue, who joined Amazon in 2014, has emerged as a champion for its logistics build-out in China.
The licence also would allow Amazon to cut shipping costs by bundling products from small and medium-sized companies to fill up containers, analysts said.
Meanwhile, Amazon rival Alibaba has been taking more control over its logistics, spending billions on buying stakes in package delivery companies and launching a logistics arm that has been investing in warehouses.
Amazon imported 10,000 TEU into the US last year and received an additional 20,000 TEU from merchants as part of the company's Fulfilment by Amazon programme, according to an analysis by Ocean Audit, a freight auditing consultancy.
The retailer operates more than 120 fulfilment warehouses worldwide that hold millions of products supplied by third party merchants and Amazon's own vendors and where warehouse workers pick and pack items for shipment.
As a forwarder, Amazon now plans to handle cargo and customs brokerage for goods headed for Japan, Europe and the United States to be lodged in its warehouses that can ship goods to customers.
In documents submitted to the Shanghai Shipping Exchange, the company said its forwarding unit, Beijing Century Joyo, plans to charge customers between US$530 and $2,530 to transport an FEU from Shanghai to Hamburg.
The rate is comparable to those charged by other forwarders, and the wide range gives it flexibility to adjust its prices based on volume. Amazon would then be able to compete with United Parcel Service and DHL.
This appears to be a similar move to Amazon's fastest growing unit, its cloud computing unit Amazon Web Services, which is now hosts data for other companies.
Seattle-based Amazon faces increasing pressure to reduce shipping costs, which were up 37 per cent in the last quarter compared to the same period a year ago.
Amazon's Chinese subsidiary also made a similar application with the US Federal Maritime Commission in November.
Brian Xue, vice president of operations for Amazon in China, signed the government filings. Mr Xue, who joined Amazon in 2014, has emerged as a champion for its logistics build-out in China.
The licence also would allow Amazon to cut shipping costs by bundling products from small and medium-sized companies to fill up containers, analysts said.
Meanwhile, Amazon rival Alibaba has been taking more control over its logistics, spending billions on buying stakes in package delivery companies and launching a logistics arm that has been investing in warehouses.
Amazon imported 10,000 TEU into the US last year and received an additional 20,000 TEU from merchants as part of the company's Fulfilment by Amazon programme, according to an analysis by Ocean Audit, a freight auditing consultancy.
The retailer operates more than 120 fulfilment warehouses worldwide that hold millions of products supplied by third party merchants and Amazon's own vendors and where warehouse workers pick and pack items for shipment.
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