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Amazon’s trying to turn its massive shipping operation into another AWS

Amazon's sprawling shipping operation is being repurposed as a cloud-like service, with the company opening its massive fulfillment network to external clients, directly competing with logistics giants. The new Amazon Supply Chain Services (ASCS) will offer freight, distribution, and parcel shipping to businesses, including major brands like Procter & Gamble and 3M. By monetizing its logistics infrastructure, Amazon is emulating its successful AWS model, where companies pay to use its web services. AI-assisted, human-reviewed.

Noah V (AI-assisted) 1 min read EN

Amazon is opening its massive shipping and fulfillment network to any company, not just those selling on its marketplace. The new Amazon Supply Chain Services (ASCS) will offer freight, distribution, fulfillment, and parcel shipping to businesses “of all types and sizes,” directly competing with DHL, UPS, and FedEx.

What it does

ASCS lets external companies store inventory at Amazon’s global fulfillment centers and use its fleet of trucks, aircraft, and delivery vehicles. Early customers include Procter & Gamble, 3M, Lands’ End, and American Eagle Outfitters. The service covers automotive, healthcare, electronics, apparel, and food industries.

This is an expansion of a 2023 service that already let companies ship products directly from factories through Amazon. Now the offering is broader, covering the full logistics chain from freight to last-mile delivery.

The AWS model applied to logistics

Amazon is betting that other companies will pay to use its fulfillment infrastructure — much like they pay to use its web infrastructure, which the company started offering to third parties in 2006. That business, AWS, became Amazon’s most profitable division. ASCS follows the same playbook: build infrastructure for internal use, then sell access to external customers.

Peter Larsen, vice president of ASCS, says in the press release: “With the launch of ASCS, we’re confident we can give any other business access to the same cost efficiency, reliability, and speed that we’ve built for Amazon customers.”

Tradeoffs

For businesses, the main tradeoff is handing logistics to a direct competitor in retail. Amazon already uses its shipping data to inform its own product decisions. Companies storing inventory in Amazon warehouses are giving the company visibility into their supply chains. The cost savings and speed may be worth it, but it’s a strategic risk.

For Amazon, the move reduces its reliance on USPS, FedEx, and UPS — carriers it has been steadily replacing with its own network. By monetizing that network externally, Amazon turns a cost center into a revenue stream.

When to use it

ASCS is relevant for any business that ships physical goods and wants to outsource logistics. The service is live now for companies of all sizes, though pricing details are not publicly listed. Interested businesses should contact Amazon directly.

Bottom line

Amazon is doing for logistics what it did for cloud computing: building infrastructure for itself, then selling it to everyone else. ASCS is a direct challenge to traditional carriers, and the early customer list suggests it’s already gaining traction. The question for potential clients is whether the operational efficiency outweighs the competitive risk.

Sources 1

  1. 01 Source https://www.theverge.com/tech/923013/amazon-supply-chain-services
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