Amazon China, a subsidiary of the e-commerce giant has received a license from the US Federal Maritime Commission to operate as a Non-Vessel Operating Common Carrier (NVOCC) between the US and China.
The move is seen as a way for the company to build volumes to attract better rates and services from ocean carriers on transpacific routes. One way to achieve this would be to offer their services to the company’s own consumer product companies who sell their products through its website.
The company is looking to take more control of its own ocean freight transportation and better manage a proportion of its own supply chain costs.
The license will allow the Beijing-based Amazon China subsidiary – Beijing Century Joyo Courier Service Co., Ltd. – to purchase block space on ocean vessels for itself; and also sell to other companies.
According to Cargo Facts magazine, Amazon has made other recent moves in the airfreight and trucking industries to suggest that it could use its NVOCC license to provide third-party logistics services in the air and surface markets as well.
Another e-commerce giant, Alibaba Group, launched its own logistics company, Cainiao, in 2013 and has developed a China-wide parcel-delivery system. It plans to be capable of providing next-day delivery of goods ordered from Alibaba’s online marketplaces in 50 cities this year.
According to Cainiao, it connects and coordinates a network of more than 3,000 partners in mainland China and overseas. It has also established more than 300,000 pick-up stations where consumers can take delivery of online-ordered goods in more than 190 Chinese cities. In rural areas, Cainiao is working with regional “last-mile” delivery firms.
Alibaba cooperates with more than 180,000 physical stores across 330 cities nationwide to provide an online-to-offline (O2O) integrated service, offering seamless shopping experience to its customers.
Ultimately, both e-commerce companies will gain from managing a growing proportion of their own logistics and shipping operations and find the capacity and resources required to meet the rapid growth for on-line shopping in China.