Amazon making move into $350bn ocean freight market

Amazon is quite serious about expanding its delivery operation while making use of trucks to air freight, to speed up delivery times. And now the company is planning for ocean freight. Amazon's China subsidiary has registered to operate as an ocean freight forwarder in the US, according to the Federal Maritime Commission.

Amazon China is now listed in the Ocean Transportation Intermediaries: a list of companies authorised to sell ocean freight services. The new move would give Amazon even more control over the shipping products from China to the US.

The Federal Maritime Commission (FMC) — an independent government agency that regulates the nation's international ocean transportation system — registered a business named Beijing Century Joyo Courier Service Co.Ltd with the trade name "Amazon China" in its database.

While the registration with FMC in an initial step for Amazon to become an ocean freight forwarder — an operating body that organises shipments of products from supplier to the customer or market — there is no information as to when the operation would start.

"Amazon China now has the appropriate paperwork to provide ocean freight services for other companies. This is Amazon's first step toward entering the $350bn (£245bn, €320.73bn) ocean freight market," says Ryan Petersen, the chief executive officer of Flexport a freight forwarder based in San Francisco. Petersen is first to spot Amazon's new movement and has also shared a screen grab of the FMC directory showing Amazon China's freight forwarding license.

Explaining about the advantage for Amazon being an ocean freight forwarder he notes, "Because Amazon's ocean freight services will be far more attractive to Chinese sellers than to American buyers. Chinese suppliers would love direct access to Amazon's vast American customer base. But the idea of buying ocean freight is far less appealing for US companies selling on the Amazon Marketplace."

Speaking to Reuters Satish Jindel, a logistics consultant and president of SJ Consulting Group said that, "It has more and more control over the supply chain of their business and it gives them the ability to squeeze (costs) even further." He also said this move gives Amazon an even bigger platform against the US retailers in terms of negotiating lower prices for goods.

Amazon is already planning to lease 20 Boeing 767 jets to expand its delivery operations in order to build its own cargo operation and cut down dependency on carriers. It had already held talks with Air Transport Service Group (ATSG), Atlas Air and Kalitta Air, and intends to start the air cargo operation by the end of January 2016.