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Amazon has quietly entered the freight brokerage market
Amazon.com Inc. is eyeing a slice of the lucrative freight brokerage market.
On Tuesday afternoon, CNBC reported that the online retail giant has quietly launched a service for connecting companies in need of shipping services with trucking firms. Amazon confirmed the existence of the offering in a statement to the network, but didn’t go into detail about its plans.
CNBC’s sources said that the service first become available last year and is currently in beta. Amazon has reportedly brought aboard “hundreds” of trucking partners who are currently making deliveries in five states: New York, Connecticut, Maryland, New Jersey and Pennsylvania.
Amazon’s freight brokerage service enables companies to book shipments through an online interface that automatically generates a price quote for each assignment. Carriers, in turn, can view and accept orders through a similar self-service console. Once a trucking firm confirms an assignment, instructions are sent to the selected driver through an app called Relay that Amazon originally developed for use in its own supply chain.
Amazon is the latest in a growing list of tech firms taking aim at the freight brokerage market, a traditional industry where shipments are often processed manually. Uber Technologies Inc. is another prominent player looking to disrupt this segment. In the filing for its upcoming public offering, the company disclosed that its Uber Freight division generated revenues of $125 million last quarter.
The ride-hailing provider estimates that the U.S. freight brokerage market is worth $72 billion annually. Amazon has some catching up to do with Uber, which entered the segment back in 2017, but the online retailer giant is well positioned to close the gap.
Amazon operates a massive supply chain that includes tens of thousands of trucks and a growing cargo plane fleet, as well as an extensive network of partners. The company recently announced plans to provide free one-day shipping for users in its Prime membership program. Amazon’s vast experience in transporting merchandise internationally could translate into an edge in the freight brokerage market, potentially enabling it to offer more competitive pricing than rivals or a more streamlined experience.
Photo: Amazon
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