“Amazon Enters the Trucking Industry”

Since its inception, Amazon has disrupted nearly every industry it has been involved in, from e-commerce to supply chain management. Despite its humble beginnings as an online bookstore, Amazon has branched out into a fully sized retail giant with distribution centers located across the country. Hungry for more, Amazon is now setting its sights on the freight shipping industry for two reasons. First, to solve the gap between incredible demand from its customers and the supply shortage from traditional logistics companies. Second, to make a profit by leveraging the vast shipping network it has built over the years.

Earlier last year, Amazon quietly began testing its own version of “Uber for trucking,” which pairs trucking companies with available shipments to help complete deliveries and fill seats in delivery trucks. Unlike Uber, the service utilizes licensed trucking companies instead of individuals, but we may soon see that change if driver shortages get worse. Similar concepts, such as load boards, have been around for over a decade, but never before have we seen a company from outside the transportation and logistics industry attempt to fill their own shipments.

To search for shipments, a partnering trucking company can visit freight.amazon.com to access the load board and sign up to carry the shipment. Once the trucking company accepts a job, the driver then receives all the information he or she needs to complete the shipment, including shipment and route tracking, as well as expedited check-in procedures at the warehouse via an app called “Relay.” 

While the general public has been largely unaware of the service, an Amazon representative confirmed that it is nothing new. “We work with many line-haul service providers in our transportation network and have long utilized them to carry loads for Amazon. This service, intended to better utilize our freight network, has been around in various forms for quite some time.”

However, rather than just using the network to source its own needs, Amazon is now opening it to the public as a sort of marketplace for sourcing shipments. On freight.amazon.com you can now find the headline, “tap into the scale of Amazon as we extend our carrier network to give you best-in-class service at great rates.” And if you scroll down to the bottom of the page, you can find a legal disclaimer that Amazon Logistics, Inc. is a licensed freight broker.

Of course, if we are going to call Amazon’s new freight brokerage site the “Uber of Freight” we can’t neglect to mention that Uber themselves launched their own freight service in 2017 called Uber Freight. The service has been quite successful, earning about $125 million in revenue last quarter according to information from Uber’s recent IPO filing. In the IPO filing, Uber also cited research from Armstrong & Associates which says that US companies spent $700 billion on trucking in 2017.

Taking these numbers into account, it’s rather obvious why giants like Uber and Amazon are interested in getting involved in the trucking industry. After all, solving the driver shortage would have a very high economic benefits for everyone involved.