Dive Brief:

• Amazon has made its move to operate as an ocean freight forwarder (organizing shipments from suppliers to far-flung receivers) and a logistics provider (moving goods from ports to warehouses), The Wall Street Journal reports. A request for comment from Retail Dive to Amazon was not immediately returned.

• As of this month, Amazon is posting rates for sorting, labeling and trucking services under the name of Chinese subsidiary Beijing Century Joyo Courier Service Co., according to the report.

• The e-commerce giant registered as an ocean freight forwarder last year, signaling that its ambitions to muscle into nearly all phases of freight delivery extend to nautical miles as well.

Dive Insight:

Amazon’s entry into the ocean freight forwarding and third-party logistics markets is significant because it could allow Chinese factories a more direct path to American consumers. That could also present major challenges to Amazon's U.S.-based sellers.

"I don't think people realize how threatening this is for their U.S.-based merchants, who are making money selling goods from Chinese factories," Ryan Petersen, CEO of freight logistics company Flexport, told Retail Dive last year. "It makes sense for Amazon, for a company so focused on driving down costs. But considering that 40% of their business comes from their [third-party] Marketplace, it would have to be a graceful transition and managed really well.”

Amazon has been steadily moving into various aspects of shipping in delivery, including leasing a fleet of cargo planes, the purchase of semi-trailer trucks and, of course, drones. In December, Amazon was also reportedly moving forward with plans to minimize shipping costs with the development of an Uber-like application that would match truckers with the shippers that need them to move goods.

Those moves have sparked speculation that is Amazon ultimately planning to become a shipper in and of itself, though it may be simply taking steps to drive down fulfillment costs. Amazon’s fulfillment and shipping costs rose more than its sales in its third quarter of 2016. 

Last year financial research firm Cowen & Co. questioned the viability of a full-fledged Amazon shipping service. In a note last spring, Cowen analyst Helane Becker argued that Amazon lacks the density and reach of shipping incumbents UPS and FedEx, and contended that rival retailers would be unlikely to support a delivery service owned and operated by any competitor, especially Amazon. 

Indeed, the space is fraught with difficulties not faced by most traditional retailers: Over the holidays, pilots flying for the air cargo companies tasked with Amazon’s Prime Air deliveries went on strike, alleging that pilots were forced to continuously work during their time off due to cargo company mismanagement.