We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • INDUSTRY PRESS ROOM
  • SUBMISSIONS
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • CSCMP EDGE 2022 Startup Alley
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • CSCMP EDGE 2022 Startup Alley
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
Home » Study: Amazon's FBA Onsite program poses a threat to 3PLs
Forward Thinking

Study: Amazon's FBA Onsite program poses a threat to 3PLs

May 1, 2018
Supply Chain Quarterly Staff
No Comments

As e-commerce colossus Amazon.com Inc. continues to roll out new logistics service offerings to support its rapid growth, one of those services, called Fulfillment by Amazon (FBA) Onsite, may eventually pose a threat to some of the third-party logistics providers (3PLs) that now partner with Amazon, according to a report released Thursday.

While Amazon is a major user of 3PL services itself, the company has consistently expanded its own 3PL service offerings to merchants through a series of partnerships, acquisitions, and technological applications, according to the report from Milwaukee-based market research and consulting firm Armstrong & Associates Inc.

"We predict that its continued growth—in the form of third-party sales, international expansion, and new product categories—will cause Amazon to present increasing competition to 3PLs. This is especially true for its Fulfillment by Amazon business," Armstrong said in its report, "E-commerce Logistics in the United States: Domestic and International Transportation, Warehousing and Fulfillment, Last-Mile Delivery, and Reverse Logistics."

In the latest example of this expansion, Seattle-based Amazon rolled out its FBA Onsite product to select merchants. The company invited them to ship products through FedEx Corp., UPS Inc., and the U.S. Postal Service at Amazon's deeply discounted bulk rate. In return, sellers would have to dedicate floor space Amazon inventory and install Amazon's warehouse management system (WMS) software in their own DCs, it has been reported.

Amazon has provided no public information on the program, and declined to comment on the study.

Though FedEx and UPS stock prices initially fell on the news, the carriers' networks have such massive size and scale that they will not be seriously harmed even if Amazon uses its increased volumes to negotiate lower prices, the Armstrong report said. "Rather than being a threat to parcel carriers, FBA Onsite exerts a more significant impact to 3PLs working with third-party Amazon sellers. Its recent reported efforts to enlarge its shipper base also hint at the company's interest in expanding its role as a logistics provider," the report said.

In the meantime, Amazon's market share continues to increase. The e-tailer's U.S. business-to-consumer (B2C) e-commerce market share is currently estimated at 43 to 44 percent, meaning that sales through Amazon account for about 4 percent of all retail in the country, the report said. By continuing its pilot of FBA Onsite and preparing for a reported nationwide rollout in 2018, Amazon could consolidate its control over that hefty share, and accentuate its dual roles as both an e-commerce retail and logistics powerhouse, the Armstrong report said.

Logistics
  • Related Articles

    3PLs, last-mile fleets partner to tackle ‘Amazon Effect’

    Amazon says it shipped a billion items via Prime network over peak

    Stricken by pandemic, 3PLs and their shipper customers look to strategic relationships and “nearshored” supply chains

Recent Articles by Supply Chain Quarterly Staff

Freightos completes plan to go public on NASDAQ exchange, raises $80 million

Retailers lose visibility as they outsource last-mile delivery, FarEye says

WiseTech buys New Hampshire drayage and trucking visibility software firm for $230 million

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Forecasts call for freight rate slumps in 2023

  • Projected U.S. recession in early 2023 will soften freight market

  • Inflation drops again as interest rate hikes hit home, NRF says

  • How to avoid the next crisis: A new approach to supply chain agility

  • Five levers to build a resilient supply chain

Featured Video

20221107korber large vs

Enhancing Customer Experience with Your Supply Chain Strategy

Viewer Contributed
With the rise of e-commerce, many businesses have had to transform their warehouses to handle online orders in addition to regularly scheduled inventory shipments. This means warehouses need more information than ever before to ensure they can meet customers' needs. As a result, companies need to select warehouse...

FEATURED WHITE PAPERS

  • Guide to Pallet Rack Safety

  • 3PLs: Complete Orders Faster with Flexible Automation

  • A shipper's guide to navigating post-pandemic holiday freight

  • THE NEW WAY TO WAREHOUSE: 4 Innovations in Automation & Robotics to Boost Warehouse Productivity

View More

Subscribe to Supply Chain Quarterly

Get Your Subscription
  • SUBSCRIBE
  • E-NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2023. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing