Amazon Beating the Supply Chain Crisis With New Logistic Networks
Even from a layperson's standpoint, it is evident that Amazon is doing great when it comes to customer package deliveries while its competitors are struggling. The reason behind it, in a nutshell, is simply amazon seeing itself as more of a logistics company than an online retailer. From transporting cargo through flights, making their containers, to even opening a subsidiary in China for shipping, they are leading the vanguard in shaping the future of logistics. Amazon's progressive control over its supply chain over the years has cushioned much of the supply chain disruption blow for them, but as is evident from the 25% rise in prices of goods and a 14% rise in out-of-stock items, it is not enough.
In addition to this, Amazon has recently taken many bold and even expensive endeavors, such as chartering its ships, for example STAR LYGRA. Chartering smaller ships can route them to smaller ports, where larger vessels cannot dock and hence have no congestion, leading to speedier deliveries. The cargo containers themselves are sent to the hinterland, and it takes time to return the containers. Amazon started making its containers using a company in China called CIMC. These containers are used in the rail and other transport systems after delivery, so they don't have to be returned, saving precious time. For higher-margin goods, Amazon chooses to send them via flight. Amazon has been building its air fleet since 2016, and it will reach 85 planes this season, bypassing ports altogether.
Amazon predicted the supply chain congestion and has been preparing for it. Along with the steps mentioned above, it has opened processing centers across the U.S. and has attracted seasonal workers with more excellent bonuses and benefits. As a result, prices have risen, but they have managed to beat their competitors, and besides, as a retailer having the shelves filled is better than empty ones.
