Amazon Bypasses Major Ports to Save on Shipping
By chartering the 55,183-dwt bulk carrier Olive Bay and having it dock at Everett, Washington, just north of Seattle, Amazon.com did an end-run around the shipping congestion that have stranded Christmas imports in US west coast ports, reports Bloomberg.
What’s more, it offered shippers big discounts that ignored soaring rates, cited by supply chain principals.
“[Amazon] prices are phenomenal,” said David Knopfler, whose Brooklyn-based Lights.com sells lighting fixtures. He spoke of US$4,000 to ship a container from China compared with the $12,000 demanded by forwarders.
Amazon also simplified the process since it oversees the shipment from China to its US warehouses. Others include lots of intermediaries where cargo swaps hands, presenting opportunities for miscommunication and delays.
“It’s a one-stop-shop from Asia to Amazon,” says Walter Gonzalez, CEO of Miami-based GOJA, which sells various products on Amazon including Magic Fiber cleaner for glasses.
“It reduces the gray areas where the shipping process might fail.” Mr Gonzalez said his company, which has been using Amazon’s global logistics service, has about 95 per cent of the inventory it needs to meet holiday demand.
Other big retailers, including Walmart have also chartered freighters or sought to hitch a ride on ships loaded with iron ore, coal, grain or other commodities, freight consultants say.
Seattle-based Amazon has also docked at the Port of Houston to ensure that the company will get its fair share of the $207 billion of this year’s online spending expected to be up 10 per cent from last year.
In addition to chartering ships like the Olive Bay, Amazon hired 150,000 US seasonal workers to help pick, pack and ship items, boosting pay and offering signing bonuses of up to $3,000.