News / Amazon 'by special request' LTL unveiling raises eyebrows

Image: Amazon

Amazon raised questions in the US less-than-truckload (LTL) sector last week with the unveiling of its expanded LTL offering, declaring it was responding to interest in the market.

The announcement also caused some confusion over what the e-commerce giant turned logistics provider is doing in the LTL sector.

Amazon’s LTL service previously offered inbound transport to its fulfilment centres, but now declared it “officially open for all businesses to any type of destination”.

Jim Ruiz, director of Amazon Freight, declared: “Now Amazon LTL can move your freight wherever it needs to go, servicing destinations nationwide for businesses of all sizes.”

Customers can: move shipments from one to six pallets, or 150 to 15,000 pounds; can book next-day pick-ups for orders placed by 5pm; use same-day pick-up through drop trailers; or schedule regular pick-ups for larger shipping volumes going to clients’ warehouses, distribution centres, and retail locations as well as to Amazon fulfilment centres.

For improved visibility, added the firm, the service features GPS shipment tracking, automated appointment scheduling, electronic proof of delivery, and EDI connectivity with current shipping systems.

According to Mr Ruiz, the new offering meets demands customers have expressed repeatedly, notably visibility in line with truckload services.

The new service is under the wings of the Amazon Supply Chain Service unit, unveiled last month.

According to Amazon, LTL “is built on Amazon’s own operational capabilities and the same foundation that powers its supply chain at scale”, including “terminals across the country”, and a fleet of over 80,000 trailers and 2,400 intermodal containers.

This raised some eyebrows in the industry, as Amazon had previously not been associated with a network of LTL terminals, an aspect widely considered the chief entry barrier to the sector.

“What has 80,000 trailers got to do with LTL? And who needs intermodal containers for LTL?” asked Satish Jindel, founder and president of SJ Consulting. “You need a terminal network,” He added that the biggest LTL carriers don’t have one-third of the trailers Amazon touted in its release.

The Loadstar asked Amazon whether it had a network of LTL terminals, if it was using fulfilment centres, proprietary infrastructure and equipment for the new service, and if it was using third-party service providers.

A spokesperson said Amazon Freight contracted with carriers for pick-up and delivery for the LTL service, but provided no details on the nature of the facilities used, other than the company has terminals and will add more this year.

The Amazon Freight LTL section of the company’s website features a map of its US coverage, which shows a high density of terminals for an LTL operation, with five facilities around Indianapolis, three in the Detroit area, and two in the Kansas City area, which is more typical of fulfilment networks.

Mr Jindel concluded that Amazon was essentially setting itself up as a broker for LTL services, competing with the likes of CH Robinson rather than with LTL carriers themselves. He said it would be hard for Amazon to build up a network of LTL terminals, which are noisy, and operating at night, this type of facility meets strong opposition in local neighbourhoods.

“Amazon should have bought Yellow’s network,” he said, referring to the low-cost LTL that ceased operations, with its terminals snapped up by rival LTL operators.