Amazon Directly Enters the LTL Game

While it shouldn't be much of a surprise, Amazon has announced they have entered the LTL shipping business for sellers who are sending inventory into the FBA warehouses. Prior to this change, sellers could only send inventory via LTL by either using one of Amazons partnered carriers, or by contracting a similar carrier on their own dime.

At quick glance, the e-mail above may look like something that already exists, because in truth, Amazon has offered LTL services in general into their warehouses for a number of years. What is different here is that Amazon has now taken the initiative to not only be the carrier handling the shipment, but also seems to promise a very quick delivery time. My question is, yes they promise to deliver within 24 hours, but does that mean they will receive in a sellers inventory within that same time frame as well? As a comparison, a seller who currently uses the partnered carrier network to handle their LTL inbound freight may see that the carriers normal delivery time between the seller warehouse and Amazon FC is only 1 business day. In reality, the freight will sit on the carriers dock for days or weeks longer awaiting clearance from Amazon which will allow the carrier to actually make the delivery. The Amazon FCs are notoriously always backlogged, especially at Q4. To make matters worse, carriers will usually only deliver LTL freight once they have a full trailer for Amazon (made up of additional sellers inventory headed to the same location). On top of all this, the carrier has to also request a delivery appointment once that trailer is ready for Amazon and there is usually a first in first out policy on the partnered carriers dock. All of this spirals into what can be a very long, and tedious wait for the anxious seller.

This new service appears to be in Beta mode, as it is only available to sellers in the LA, New Jersey, and Chicago areas who are shipping into ONT8, LGB8, ABE8, and MDW2, however, if successful, expect this to roll out to the rest of the Amazon network relatively quickly. This should be a good development for sellers, but for the big freight companies, many of which rely on the Amazon volume to survive, this is a punch in the stomach. Take the recent bankruptcy of NEMF for example...many industry experts feel the Amazon contracts they relied on played a part in their demise. Good contract or bad, the carriers will now have to replace that revenue entirely.

I'll be speaking about this and much more regarding logistics in your business at the Resonate Conference hosted by Seller Labs on May 7-8 in Atlanta. For details, or to sign up, head over to: https://www.sellerlabs.com/resonate/. You can use promo code TYLER to save $200 off your admission. See you there!