Cargo ships might not be as intriguing as drones, but they represent a potentially lucrative new business opportunity for Amazon. The e-commerce behemoth’s China subsidiary can now provide ocean freight services to other companies.
Flexport, a freight forwarding startup, first broke the news that Amazon China is now listed on the Federal Maritime Commission’s site as a licensed ocean transportation intermediary in a blog post written by its chief executive officer Ryan Petersen. This means that Amazon China can reserve cargo space on vessels and sell it to other companies, but it can’t operate its own ships.
Petersen notes that this will allow Amazon to enter the ocean freight market, which he says is worth $350 billion, and removes a major pain point for Fulfillment by Amazon, its logistics service, by making it easier for Chinese merchants on its platform to sends goods to the United States. TechCrunch has contacted Amazon for comment.
In turn, this may help Amazon compete more closely against Wish, the mobile commerce app with a reported valuation of $3 billion. Wish lets shoppers buy inexpensive goods directly from vendors in China. Its simple, consumer-friendly interface gives it an edge over Alibaba.com, which targets the wholesale market, but it has been called the “anti-Amazon” because of its long delivery times (items from some vendors take up to a month to reach their destinations).
Wish is looking at ways to help vendors reduce shipping times, including adding warehouse space in the U.S., Europe, and China, but Amazon China may be able to woo vendors and shoppers over by providing its own ocean freight service.
It’s still unclear if Amazon China will offer freight forwarding services to U.S. merchants. Managing ocean freight shipments is often difficult for small- to medium-sized businesses because it involves working with several providers and relying on old-fashioned communication methods like faxes.
Several tech startups (including Flexport) have received funding to simplify the process, but Petersen believes they don’t have to worry Amazon intruding on their turf because U.S. businesses–even those that sell products on Amazon–will be reluctant to entrust a “ruthless” competitor with supply chain information.