Amazon is expanding it's supply chain distribution services
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What is the main topic discussed in this episode?
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Time for our daily tech and business report. Today we're joined by Bloomberg's Kaylee Lapara. Amazon is now offering other businesses access to its supply chain and distribution services in one comprehensive package. The debut of this package, known as Amazon supply chain services, has already seen shares of rivals like FedEx dip today. Kaylee, talk about who this is going to help, obviously other businesses, and really is it, you know, a bite at at places um like FedEx.
Mm, that's an interesting uh question. You know, m Amazon has been building out its delivery network for years. You know, we've certainly seen all the trucks coming to our houses. Um, but that's really been for sellers on its own platform, Amazon Marketplace. So what's new now is that Amazon is opening up this capability parcel shipping, freight shipping, distribution and fulfillment. um that it was using for its own sellers. Um and it's opening that up to any other uh customer. So that can be, you know, th they named customers like Lands End, so that's a retailer or three M, an industrial customer. Um so it really it does mean that they are competing directly with the likes of UPS, FedEx and then also some logistics and trucking companies.
Is it gonna be comp uh cheaper for companies like Lands N to go with Amazon?
Well, I can't say definitively that that's the case, but I would imagine that that is Amazon's um uh competitive edge. Um they've certainly made quick delivery very efficient. Um and as we also know some other players in the industry have been raising prices, uh, particularly uh just as fuel prices are going up and things like that.
Yeah, I would imagine that if you are a smaller business um and you're trying to, you know, cut costs, it would be helpful to have somebody as reliable as Amazon and and with and with the f reach that it has to utilize their their their services.
Right. Um and I will say UPS and FedEx and other logistics providers do offer um these same types of services that Amazon is now offering. Um but right, like you said, it it's nice to have them all kind of bundled in one uh in one package together. Um, maybe if if cost is a is a um competitive edge that they have and then even just to have more options, right? Um, that can also be helpful.
Talk about uh the reaction from FedEx and UPS.
Right. We saw uh FedEx and UPS shares sink today on the news, um, likely because of that increase direct competition from Amazon. Um what's notable here is Amazon has been somewhat encroaching on those companies' market share for years. Like we saw last year, um Amazon alone shipped about a quarter of parcels in the US. Whereas UPS and FedEx combined shipped about a third. So you can see how Amazon's uh really coming up on that market share. Um but we do primarily think of Amazon as an e commerce shipper. Um, you know, we go there when we need like our toothbrush or something like that. But At the same time so UPS and FedEx are pivoting to more like specialized shipments like healthcare or industrial shipments, automotive.
Um because that business can be more profitable for them.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:00–4:34
2
What is Amazon Supply Chain Services (ASCS) and why is it launching now?
4:34–5:12
3
Who are the primary customers for Amazon's new supply‑chain package?
5:12–5:38
4
How does Amazon's offering compare to UPS and FedEx services?
5:38–6:03
5
Will Amazon's entry drive down logistics costs for retailers like Lands' End?
6:03–6:11
Speakers
1 identifiedMore from KCBS Bloomberg Tech and Business Report
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