Why Amazon Is Expanding Its Logistics Capabilities to the High Seas

Earlier this year, the news that Amazon China had registered to operate as an ocean freight forwarder in the U.S. surprised nearly everyone. The move means that Amazon will be able to organize the shipment of goods from a factory in China to a company or customer in the U.S.

The filing was first spotted by Flexport, a logistics startup, and though Amazon has yet to comment on the strategy behind the move, it seems entirely logical.

"It's a very smart move," said Jaime Jimenez, CEO of iContainers, a startup trying to digitize the ocean freight industry. "They're going to make it easier for Chinese suppliers to get stock to American customers."

As Jimenez explained, the $350 billion ocean freight industry is completely outdated and a nightmare to deal with. If a merchant wants to ship a container from China to the U.S., they could spend up to 40 days emailing with various providers and carriers trying to figure out how much it would cost and how long it would take.

In the last year, Amazon has imported about 10,000 20-foot containers into the U.S., and received an additional 20,000 containers from merchants as part of the Fulfillment by Amazon program, according to Ocean Audit, a freight auditing consultancy. About 90 percent of the FBA shipments originated in China, according to Ocean Audit.

To get a better idea of how complicated the ocean freight industry is, iContainers asked 40 freight forwarders for a quote to ship a container, and only half of them answered within a week and 59% weren't even able to provide them with the door-to-door quote they were looking for.

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