Leaked documents show Amazon is making a big play to bypass UPS and FedEx

Jeff Bezos
Amazon CEO Jeff Bezos Business Insider

Amazon’s ambition to build a global shipping and logistics business seems to be much bigger than what most people thought, according to leaked documents discovered by Bloomberg’s Spencer Soper.

On Tuesday, Bloomberg unearthed internal documents from 2013 that laid out Amazon’s plan to build up a global delivery network that would compete directly with companies like FedEx and UPS.

The project, internally called Dragon Boat, is intended to launch a new business called “Global Supply Chain by Amazon,” as soon as this year, the report said.

The document describes Dragon Boat as a “revolutionary system that will automate the entire international supply chain and eliminate much of the legacy waste associated with document handling and freight booking.”

“Sellers will no longer book with DHL, UPS or Fedex but will book directly with Amazon,” the report writes, according to Bloomberg.

There has been a series of reports recently that showed Amazon’s ambition to expand its logistics business. It was reported to have bought a bunch of truck trailers, freight ships, and delivery flights, while in its latest 10-K, it described itself as a
“transportation service provider” for the first time.

During its most recent earnings, Amazon CFO Brian Olsavsky seemed to play down rumours of a full fledged logistics business, saying the initiatives were intended to”supplement” its existing partners, not to “replace” them.

But some analysts didn’t seem to buy into Olsavsky’s comment. Colin Sebastian of Baird Capital believes Amazon is gearing up to create an in-house logistics department that would allow it to take full control of its fulfillment process, and bypass current shipping partners like UPS and FedEx.

“Amazon may be the only company with the fulfillment/distribution sophistication and scale to compete effectively with incumbent service providers (UPS, FedEx),” Sebastian wrote in a recent note.

Read the full Bloomberg report here>>

Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.

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