The news of the biggest e-commerce site – Amazon – developing and launching its very own shipping service in order to compete with 3PLs like UPS and FedEx has rocked the shipping industry.
Though Amazon hasn’t confirmed this news, many supply analysts suspect that it is very likely going to happen.
How will this affect 3PLs, supply chain managers, and retailers?
What Does Amazon Shipping Service Mean for 3PLs?
3PLs will Lose Business
First and foremost, the most obvious impact that 3PLs would experience is a disruption in their business. Currently, Amazon uses traditional 3PLs (UPS, FedEx, etc) like every other business. However, if the e-commerce giant launches its own shipping services, the 3PLs that they use now will lose their business, which will have a serious impact on their success. Plus, these 3PLs will have to go up against Amazon’s shipping service and try to vie for the market share.
Smaller 3PLs Could Shut Down
Amazon is so advanced in everything that they do. If they were to start their own shipping service, there’s no doubt that it would also be extremely advanced. As such, smaller 3PLs that don’t have access to cutting-edge technologies and aren’t able to develop new approaches could potentially shut down.
3PLs May Be Acquired
There’s also a chance that more tech-savvy 3PLs could be acquired by Amazon. That’s because the e-commerce colossus will undoubtedly want to have control over the shipping industry, and since they have the means to do so, they will try to acquire those shipping companies that use innovative strategies. Therefore, companies that don’t want to be acquired will need to make efforts to be as savvy as possible.
The Bottom Line
If the news that Amazon is launching its own shipping service is true, 3PLs really need to be aware of the implications and make efforts to prevent having their services hit hard.
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