The Real Driving Force Behind Amazon’s New Fleet
by Akmann Van-Mary 01 Jun.
Lately there’s been a great deal of buzz surrounding Amazon’s decision to buy a fleet of the giant’s branded trailers. At first I had no interest in commenting on the matter, but after I received a few emails – I’ve decided to offer my opinion on the subject.
It’s no secret that Amazon as a company has already been engaged in the transportation industry for quite some time now – maybe not carrying the same visibility as a Walmart truck on the interstate, but their presence has still very much been out there. The truth is, any company that ships and houses as much as Amazon does – is in part a logistics company. After all, their whole business is correlated with their logistics costs – Air/Sea/OTR/Rail.
The reason this is not a move toward trucking:
Amazon has all the means to acquire many strategic and well-run trucking companies to create a top-notch transportation division without having any piecemeal investment in the sector, especially something so relatively insignificant as buying a few thousand trailers. There’s no real reason in my opinion for a company that size to test the waters of trucking with trailers that still require the power from a third party to pickup and deliver to distribution centers. Walmart has one of the largest private fleets because early on they knew that if they wanted to be a dominant player in their industry, owning such a fleet was absolutely essential. Therefore, I believe that the day Amazon decides to own a fleet, they will take the route of acquisition and nothing else.
The way I see it: I read the Amazon announcement as a warehousing play. It’s far more of a supply chain shift, rather than a trucking move. Let’s go ahead and call it what it really is: A very flexible set of readily accessible small warehouses on wheels that are available to be dispatched at any given moment. This saves the giant an enormous amount of dwelling time, since those trailers will probably be pre-loaded with products ready to be deployed wherever they are needed in relativity to supply and demand, i.e. the (FEMA Model). The branding is just icing on the cake, seeing those 53-foot trailers rolling down the US highways.
I may find myself in a situation very soon, needing to apologize for getting this whole thing wrong and I will not be too proud to stand corrected at that time. However, I asked the vintage Magic Eight Ball in the Amazon warehouse if I was onto something and it responded, “Signs Point to Yes.” Can’t argue with that.