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What’s Ahead for Amazon’s Supply Chain Model?

by Morgan Bell | Oct 04, 2016

Amazon’s plans for an end-to-end global logistics and delivery capability continue to be a hot topic around the industry. Supply Chain Digest reported in 2015, that Amazon rolled out more than 40 small urban distribution facilities in the U.S. with the goal to enable delivery to a customer’s doorstep in 60 minutes or less.

Amazon currently offers its technology platform and web storefront experience to other companies, merchants, and individuals to provide fulfillment services. Amazon’s new logistics plan is to provide storage, packing and shipping, and to consolidate exports to destination countries at regional shipping hubs.

The company unveiled its newly branded Boeing 747-300 and plans to release an entire branded fleet in the near future. Although Amazon says it doesn’t intend to replace partners such as FedEx or UPS for package delivery, the new strategy sets framework for Amazon to take on freight forwarding and brokerage services directly, eliminating the middlemen.

In the process of globalizing its supply chain, Amazon plans to attract foreign subsidiaries in China, India and elsewhere. The goal is to consolidate dutiable goods destined for regional shipping hubs in Foreign Trade Zone facilities in the U.S. to store, package and quickly ship products in order to increase profit margins and shave supply chain costs. 

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