Amazon has been making its own shipping containers and chartering private ships to avoid major bottlenecks in the supply chain. While the majority of retailers have been forced to wait for months-on-end with goods trapped at sea, Amazon has been able to bring goods into ports in a matter of days. Ocean freight analyst Steve Ferreira told CNBC that last month an Amazon cargo ship only waited outside a port for two days. Meanwhile, ships at the nation’s largest port have waited for up to two months.
Amazon has been building up its transportation network for years — inadvertently preparing for a supply-chain crisis.In 2018, the company began making its own 53-foot shipping containers in China. The navy blue containers are embossed with Amazon’s signature arrow logo and travel primarily on ships that are chartered solely for the company. In its first year, Amazon Logistics shipped over 5,300 containers from Beijing to ports in California and Washington state. Since, Amazon has progressed to the point that it is shipping over 10,000 of its own containers per month and ranks among the top five transportation companies in the Trans Pacific, according to Ferreira.
Since the pandemic started, shipping container prices have surged from under $2,000 to over $20,000. Containers are also in short supply, as port delays tie up millions of shipping containers at sea. The Amazon-made containers ensure the company can prioritize where the containers are needed most without having to send them back to Asia after each delivery.
The e-commerce giant has also chartered its own bulk freighters for several years, a strategy that has come in handy this year. With its own ships, Amazon can easily choose which ports to visit and avoid backlogged ones in favor of smaller ports like the Port of Houston or the Port of Everett in Washington state, CNBC reported. When Amazon first began building its transportation ecosystem, the company used it to ship less than 47% of its goods. Since, the network has grown to engulf about 72% of Amazon shipments, according to SJ Consulting Group.
An Amazon spokesperson did not respond to a request for comment on its transportation strategy.
Last month, Bloomberg reported that Amazon has thrown about $4 billion into side-stepping major shipping delays. The publication noted that Amazon had begun sending out shipments in half-empty trucks to allow for more timely deliveries and brought on about 150,000 more seasonal workers through boosting pay and offering $3,000 signing bonuses.Other companies like Walmart and Home Depot have followed Amazon’s lead this year.
The retailers have pivoted to anything from chartering their own bulk freighters to flying in goods or using smaller ports, but Amazon has an advantage inasmuch as its transportation network has a longer history.
Source: Business Insider