CHINA TOPIX

11/02/2024 10:31:20 am

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Amazon China Granted License to Become Ocean Freight Forwarder

A freighter waits goods for exporting at a container terminal

(Photo : Getty Images) Amazon now has the capability to transport items on football-field-size cargo ships that ferry 40-foot containers to and from major ports around the world.

Amazon would not stop at drones to improve its delivery system as the Chinese arm of the company has been granted a license by Federal Maritime Commission to become an ocean freight forwarder.

Amazon's subsidiary in China applied for a United States maritime freight forwarding license. Flexport has obtained information that Amazon China has been granted the license, which can be found in the directory of licensed Ocean Transportation Intermediaries.

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Amazon now has the capability to transport items on football-field-size cargo ships that ferry 40-foot containers to and from major ports around the world. This comes after speculations last month that the company is leasing a fleet of cargo planes. This is just a confirmation of the company's ambition to own more of the delivery process.

With this latest development, Amazon can reduce the logistics and shipping costs of its products coming from China.  The cost of shipping items over the ocean is quite minimal, at around $1,300 per container, according to Flexport. With that, shipping a television from China to America will just cost as low as $10. Meanwhile, transporting the same item by air could cost hundreds of dollars.

With the direction Amazon is heading, it could open up a business that can compete against FedEx or UPS.

However, as a freight forwarder, Amazon is not expected to sail its own ships. Instead, the company is expected to sell existing capacity and oversee the shipping process. In the near future, Amazon can manage a shipment from its Chinese factory all the way to its American warehouse.

This could be a perfect business for Amazon, according to Flexport CEO Ryan Petersen said. Given the company's legendary ability to reduce cost from customs clearance to inventory tracking through technology, this could be an ideal opportunity for Amazon.

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