E-Commerce giant doubles down on softer economic conditions
E-commerce giant Amazon is finally making its Buy With Prime feature available to all US merchants. This new feature will be available to all US merchants by January 31st 2023. This can potentially ramp up freight demand across the board. Mostly, for LTL shipments but to some extent truckload quantities as well.
Will The E-commerce Giant Increase Overall Freight Demand?
Amazon is the 800 pound gorilla in the room. They certainly have the market share to influence freight rates across the board. As a result, Amazon can create truck transport demand with this new feature. With increased demand comes higher freight shipping rates for carriers and freight brokers. Obviously, higher freight cost is not beneficial to everyone. It will undoubtedly affect the retail consumer, despite this unwelcomed side effect the alternative is worse.
Can Buy With Prime Service Help E-Commerce Expand?
Only time will tell how much of an impact this feature will have on Amazon’s bottom line. Albeit, we think smaller retailers will have the most to gain. Allowing smaller businesses to benefit from Amazon’s branding is huge. We feel that this feature will drive sales up and therefore increased demand for freight quotes from shipping companies.
Amazon Looks To Increase Vendors On Its Platform
As recent as 2022, Amazon had more than 9 million vendors, however only 1.9 million were active sellers. With this new service Amazon is looking to add more vendors to its arsenal. Some of these new customers are truckload quantity shippers. In fact, vendors that are capable of shipping via truckload prefer this method when shipping to fulfilment centers. They clearly understand that truckload shipping is cost effective and less expensive than LTL service.
Future business for Amazons E-commerce sector looks brighter
Many vendors that use Amazons FBA platform ship using freight brokers. A freight broker helps by securing more competitive shipping rates for vendors. In spite of this, Amazon found it necessary to purchase their own tractor trailers to meet increased demand. One can only hope that this new option will increase the demand for freight services.