Executive Briefings

Amazon Is Using Logistics for FBA Orders, Pushing Ahead on Drones

An Amazon executive said the company at this point is just using its recent investments in logistics and transportation to handle internal capacity, including servicing sellers using its Fulfilled by Amazon (FBA) program where it handles third-party orders.

"That capacity is going to be available to third parties," Paul Misener, vice president of global innovation policy and communications for Amazon, said recently at Home Delivery World. "If you're an FBA seller with inventory in our fulfillment centers, that needs to be moved. All that logistics infrastructure is going to be moving third-party products as well as retail products."

Misener said the disastrous holiday season in 2013, when a perfect storm of issues led to about 1 million late deliveries, many from Amazon itself, as the impetus for the logistics push. He added Amazon continues to work closely with all three major carriers, especially the U.S. Postal Service. "We've testified before Congress when the USPS was considering cutting Saturday delivery," Misener said. "We told them, don’t do that, add Sunday. That infrastructure was sitting idle, and it allows us to better serve our customers."

Misener wouldn't comment on whether Amazon planned to use its recent investments - including the purchase of cargo jets, tractor trailers and a major investment in ocean freight forwarding from China - to sell logistics as a service outside of its own volume or FBA customers. This model has proven extremely lucrative in the case of Amazon Web Services.

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"That capacity is going to be available to third parties," Paul Misener, vice president of global innovation policy and communications for Amazon, said recently at Home Delivery World. "If you're an FBA seller with inventory in our fulfillment centers, that needs to be moved. All that logistics infrastructure is going to be moving third-party products as well as retail products."

Misener said the disastrous holiday season in 2013, when a perfect storm of issues led to about 1 million late deliveries, many from Amazon itself, as the impetus for the logistics push. He added Amazon continues to work closely with all three major carriers, especially the U.S. Postal Service. "We've testified before Congress when the USPS was considering cutting Saturday delivery," Misener said. "We told them, don’t do that, add Sunday. That infrastructure was sitting idle, and it allows us to better serve our customers."

Misener wouldn't comment on whether Amazon planned to use its recent investments - including the purchase of cargo jets, tractor trailers and a major investment in ocean freight forwarding from China - to sell logistics as a service outside of its own volume or FBA customers. This model has proven extremely lucrative in the case of Amazon Web Services.

Read Full Article