News

Amazon has already empowered thousands of small businesses through its marketplace, and now it’s looking to do the same in the logistics space. But as it’s helping entrepreneurs, Amazon is also helping itself gain greater control over its own logistics network.

“Proprietary control over this key ‘last mile’ is a critical missing component of Amazon’s arsenal as it competes with brick-and-mortar, and depending on how much capability this new venture generates, will serve to close this gap,” Moody’s Lead Retail Analyst Charlie O’Shea said in an e-mailed statement.

Amazon has frequently relied on established third-party logistics providers (3PLs) like UPS and FedEx to fulfill the last mile. But the e-commerce boom has strained capacity for carriers, leading to high rates and even delays during peak shipping periods, such as the holiday season.

“Customer demand is higher than ever and we have a need to build more capacity,” Dave Clark, Amazon’s senior vice president of worldwide operations, said in the news release.

While Clark claims Amazon has “great partners in our traditional carriers,” the company will offer Amazon-branded vehicles and uniforms to entrepreneurs, appearing to be a direct hit at FedEx and UPS.