Amazon to Drive Down Spot Rates?


Online retailer Amazon could potentially make huge amounts of profit from reselling goods produced by Chinese manufacturers with the opening of its new shipping service, according to the Journal of Commerce.

PTI recently reported on how the US-based giant was set to create its own shipping arm.

As the company could be shipping goods at US$50 per space within forty-foot equivalent unit (FEU) containers to its Chinese vendors that are shipping from China to the US West Coast, it could simultaneously drive down spot rates.

Steve Ferreira, founder of Ocean Audit, a Connecticut-based global ocean freight auditing service, said: “A larger percentage of (Amazon’s) Chinese shippers are sending small amounts of freight.

“The most striking thing is Amazon’s ability to co-op a lot of smaller Chinese vendors and make one huge vendor.”

The retailer could also profit significantly from related fees such as bill documentation charges, which will account for $50-70 per shipment.

The Amazon shipping initiative aims to give the retailer control over the goods that are shipped from China into the US, with the Chinese market the key area of focus.

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