Amazon has successfully begun shipping goods from Chinese merchants to U.S. warehouses by ocean, the Wall Street Journal reported Wednesday.
The move into the business is part of the retail giant’s plan expand its delivery network and cut costs, supplementing the services of UPS, Fedex and other shipping companies. Acting as a freight forwarder, Amazon has been booking space on ocean freighters and transports goods between the ports and warehouses. It doesn’t own the ships, but rather acts as a logistics provider.
Since October, Amazon has coordinated the shipment of at least 150 containers of goods from China, the Journal reports.
Last year, Amazon China received a license from the Federal Maritime Commission to ship ocean freight cargo. Ryan Peterson, CEO of logistics company Flexport, broke the news in January. The company has also confirmed that it will begin to handle more if its air transport, leasing a total of 40 cargo jets from Atlas Air and Air Transport Services Group.
“The role of the freight forwarder, which is what Flexport is, and which is the license that Amazon got, is to coordinate that complexity; to string it together,” Peterson told GeekWire last March. “It doesn’t mean they’re going to own ships or planes, though I wouldn’t be surprised to see that Jeff Bezos has those ambitions.”
Expanding its delivery structure could ultimately allow Amazon to eliminate third parties and ship goods at cheaper rate, getting them to customers faster. In the short run, the idea is to give Amazon an alternative to supplement those third parties, giving the company greater capacity for shipping and extra leverage in negotiations.