E-commerce giant Amazon is disrupting yet another market. This time it’s the digital freight-brokerage sector, an emerging industry that allows shippers to connect with haulers directly to schedule loads via an online platform.
Amazon has quietly turned on its own digital-freight brokerage platform, at freight.amazon.com, a service that industry publication Freight Waves reports is “undercutting market prices from 26 to 33 percent.” The Amazon brokerage platform indicates that the company is offering “full truckload services” as a “beta service now available in Connecticut, Maryland, New Jersey, New York and Pennsylvania.”
“Tap into the scale of Amazon as we extend our carrier network to give you best-in-class service at great rates,” the online platform states.
The move follows last week’s announcement by an Amazon executive that the company plans to make one-day delivery the standard for members of its Amazon Prime program and that it will invest $800 million in the second quarter of this year to move toward that goal. Amazon’s chief financial officer, Brian Olsavsky, said the company plans to use “all available levers” to accomplish the one-day-delivery goal, including bulking up its internal resources and its third-party carrier network.
In response to that news, a Morgan Stanley equities analyst, Brian Nowak, made the following prediction early this morning, according to Yahoo Finance:
"We see [Amazon’s] 1-day Prime shipping raising consumer expectations and increasing the cost to compete in e-commerce. Over the long term, we also see this as a Trojan horse for Amazon to grow its next disruptive business ... a third-party logistics network.”
Although all the details of Amazon’s new freight-brokerage offering are not yet clear, the company’s entry into the sector appears to put it in competition with digital freight-matching players like Uber Freight and Seattle’s Convoy ― a high-flying startup in the sector that has raised some $265 million in capital and is valued at more than $1 billion. Convoy, however, competes on rates as well as service, offering data to help users maximize operational efficiency by reducing the number of trucks driving empty.