At least a few logistics titans — including FedEx, Maersk and GXO Logistics — don't view Amazon Supply Chain Services as a major competitive threat yet.
The recently announced offering from Amazon can provide a variety of logistics services to any company, not just those selling on the e-commerce giant's marketplace, including freight transportation, parcel shipping, air freight, global logistics, distribution and fulfillment.
But Amazon Supply Chain Services and FedEx are operating "two different businesses entirely," FedEx President and CEO Raj Subramaniam said in a CNBC interview, adding that FedEx offers an end-to-end global network.
"The true network is something you can pick up in any one part of the world and get it to any other part of the world in a couple of days, and for that, you need a system like what we have here," Subramaniam said.
Maersk CEO Vincent Clerc also emphasized his company's international logistics capabilities when asked about the potential Amazon threat in an earnings call last week. ASCS represents "a logical continuation of efforts" for the e-commerce giant to expand, Clerc said, noting that Amazon and Maersk frequently do business together. While Maersk expects ASCS will be a factor in the U.S. domestic logistics market in the coming years, there are differences between the two companies.
"We are active much more on the international scene where they are active much more on the U.S. domestic scene," Clerc said. "We are not so active in the express and last-mile delivery compared to what they are."
ASCS does have some international transportation capabilities at the outset. For example, it offers inbound shipping from China to several other countries via Amazon Global Logistics and charter services through Amazon Air Cargo. Other services under the umbrella like Amazon Freight and Amazon Shipping are focused on transporting goods within the U.S.
Meanwhile, GXO Logistics CEO Patrick Kelleher framed ASCS as offering a more "standardized solution" that sells access into its existing network capacity, while GXO builds standalone, customized logistics solutions. The contract logistics giant does compete with Amazon via its GXO Direct product, which provides shared-use e-commerce fulfillment, Kelleher said in an earnings call. That offering represents just under 6% of GXO's business.
"I think where we do competitively differentiate as GXO Direct is that we are servicing high-value brands that will leverage our value-added services in packaging, etching and really white glove type services for those very high-end brands," he said.
Both Kelleher and Maersk's Clerk flagged data security as a concern among customers in the context of ASCS's launch. Amazon's private label business can compete with a wide range of brands and has faced regulatory scrutiny in the past.
"For enterprise customers, protecting their data is a top priority," Kelleher said. "Many companies are going to be reluctant to give a competitor deeper visibility into their inventory, demand patterns, sales channels, financials."
An Amazon spokesperson previously told Supply Chain Dive that the company prohibits using sales data received or collected from ASCS customers to make sourcing, inventory level or pricing decisions for products in its own store. However, Amazon does use the data logistics customers share to operate and improve its services, the spokesperson added.
Large companies like Procter & Gamble, 3M and American Eagle Outfitters are already ASCS customers. While Amazon's announcement of ASCS highlighted major businesses, CEO Andy Jassy said in a CNBC interview that small- and medium-sized firms may end up getting the most benefit from using ASCS.
"Today, to try and compile a supply chain for any size business, but particularly a small business that doesn’t want to have to build out all those capabilities themselves, it’s time-consuming and expensive," Jassy said.
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