Amazon.com, Inc. (NASDAQ:AMZN) Looking To Eliminate The Middleman With Trucking App

December 19, 2016 - By Ruchi Gupta   ·   0 Comments

Amazon.com, Inc. (NASDAQ:AMZN) is reportedly developing an app which, when launched, will match truck drivers with shippers. This will enable truck drivers to easily find shippers who require cargo to be moved. The Amazon trucking app is expected to cut out the third parties such as middlemen who charge about 15% for connecting truckers with shippers. The news of the app which is expected to be unveiled next summer was first reported by Business Insider.

Driving directions

Among the features of the trucking app include driving directions and real-time pricing. This is besides the more personalized features such as recommendations for drivers on when to stop and a tour of the loading point and the delivery point. Additionally, the app could also have payment options and tracking options, all of which could help quicken the shipping process.

driving-directions

News of the trucking app reinforces the view that Amazon intends to wear another hat as a logistics firm that offers full-scale services over the entire delivery chain. In the past one year, Amazon has bought dozens of cargo planes and thousands of trucks. The e-commerce giant has also launched new services such as Amazon Flex which deliver orders to the doorstep of the customer. The bigger goal for Amazon, though, is to enhance the middle segment of the delivery cycle which is in the hands of third-parties that eat into Amazon’s profits by charging hefty fees. This would make shipping not only cheaper but also more efficient.

Warning shot

Amazon’s trucking app will, however, find numerous startups that are competing in the same space. This includes Trucker Path and Convoy, the latter of which Jeff Bezos, Amazon’s chief executive, is an investor. Amazon’s move should also be a cause of concern for the incumbents such as J B Hunt Transport Services Inc (NASDAQ:JBHT) and C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW), the latter of which is Amazon’s client.

The team that Amazon has assembled to work on the project is mainly based in Seattle, Washington. In one of the job vacancy advertisements, Amazon has described the project as “an exciting and confidential initiative in middle-mile transportation organization.”

In Friday’s trading session, Amazon fell 0.42% to close the day at $757.77 a share.

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By Ruchi Gupta

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