Amazon Opens Logistics Network to Outside Businesses

Amazon Launches Supply Chain Services for External Businesses

Amazon announced on May 4 that it is rolling out Amazon Supply Chain Services, a new offering that lets other businesses use its logistics network to store, move, and deliver goods. The service will handle shipments ranging from raw materials to finished products, extending access to Amazon's supply chain infrastructure beyond its own retail operations.

Infrastructure and Service Scope

Amazon said its infrastructure includes a fleet of more than 100 cargo planes and a large network of warehouses and sorting hubs, alongside services such as distribution, fulfillment, and parcel delivery. The modular setup is designed for businesses of many sizes, including companies that do not sell on Amazon's marketplace.

Amazon Supply Chain Services adds freight, distribution, fulfillment, and parcel shipping capabilities, with the company also implementing data governance measures. Amazon sends off-platform orders in unbranded packaging by default and bars internal teams from using non-public data from Multichannel Fulfillment (MCF), Amazon's service for orders placed outside its marketplace, when making sourcing, inventory, or pricing choices for products in its own store.

Customer Access and Use Cases

Companies can use the system across sales channels including their own websites, social media, and physical stores. Amazon said customers already include Procter & Gamble, 3M, and American Eagle Outfitters. Lands' End is also listed as a current user of parts of Amazon's supply chain services.

Strategic Positioning and Market Impact

Amazon compares this rollout with Amazon Web Services (AWS), when it turned internal IT systems into a product. The company plans to offer the same "infrastructure, intelligence, and scale" from its supply chain operation to "businesses everywhere."

The announcement affected logistics sector equities. Shares of FedEx and United Parcel Service (UPS) fell after the announcement, as Amazon now competes more directly across freight, distribution, fulfillment, and parcel shipping.