Amazon’s transportation and warehousing strategy

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 Overall transportation objective

• The Transportation Objective of amazon is to provide products and services to its customers
across the world immediately they need them. The company continuously puts effort into
delivering its products to customers in the shortest time possible.

• The success of Amazon so far has been due to its effectiveness in delivering items to its
customers. Amazon also aims at developing a cost-effective transport rates to increase
efficiency. In addition to ensuring efficiency delivery of products, the company aims at
achieving a timely delivery of products to its warehouses.

• Amazon is focused on creating strong delivery networks. In order to create these strong

delivery network, the company focuses on improving its transportation modes.
 modes of transportation

• Amazon uses various transport modes to deliver products to its customer. Some of the most
common modes of transport that the company uses include planes, trains, roads and drones.
• Amazon owns cargo plans which it uses to transport products to customers (Alba, 2016). Usually,
amazon uses plans to transport light-weight loads (Reuters, 2016). The use of planes ensures that
the company is able to deliver its products to customers more quickly and efficiently. One
advantage of using planes as a mode of transport is that it enables the company to deliver goods
over a long distance quickly.
• Amazon uses trains to transport products to customers who are connected by rail. However, it the
use of train is in a very small scale. The main problem with train use for delivering products is its
inflexibility. They can assure door-to-door deliver
• Amazon has invested heavily on road transport. The company has thousands of truck trailers and
hundreds of trucks that it used to deliver products to customer (Bary, 2016). The importance of
road transport is that heavy loads can be deliver to direct to customers.
 Modes of transport (cont….)
• Recently, the company has started experimenting on the use of drones to deliver goods to
customers  (Price, 2017) . Drones have the ability to deliver products to customers anywhere
at anytime.

• Since they are unmanned, drones will not be affected by environmental factors such as
extreme climate. However, the main challenge facing the use of drones for transport is its
maintenance and legal requirements (Price, 2017).
 locations of the factories and warehouses

• Amazon operates globally.

• Its factories are located in various parts of the world including Asia, North America and Europe.

• Amazon warehouses are located closer to factories. Usually, new warehouses are opened in close
proximity to urban markets(LeBlanc, 2017).

• Its warehouses are also located in Asia in countries such as India, China and Japan; in North America
in places such as Arizona, Connecticut, California, Indiana and Georgia; and in Europe in countries
such as England, Italy, Germany and France.

• Amazon warehouses takes the form of fulfillment centers. The company has many fulfillment
centers through its supply chain.

• Fulfillment centers are usually large store that are able to handle large quantities of products at a
time.
Advantages and disadvantages of the locations of warehouses and
factories

• First, location of factories in different parts of the world ensures that the company is able to
produce products that arises from a specific segment. For instance, when a costumer in Italy
orders a product through the online platform of Amazon, the company is able to ensure that
the product is made and delivered within two days since its factories and warehouses in Italy
are able to process the order quickly.

• Location of warehouses in different parts of the world is advantageous to the company as it

ensures that products are delivered within the ordered timely. Warehouses store products that
are waiting demand to arise.
 Cont……
• Opening of new warehouses in close proximity to urban market ensures that the company is able to
deliver its products very fast to the nearby market(LeBlanc, 2017).

• The location of its warehouses is also advantageous as it allows the company to run its Fulfillment
centers . In the warehouses, companies deliver their products to amazon warehouses. Amazon then
prepares the products for sale. Some of the activities that the company can perform while the products
are in the warehouse include packaging and sorting of materials.
 The economic and political factors
• Several economic and political factors affect transportation and warehousing network of amazon.

• One political factor that can affect the transportation and warehousing network of amazon is regulation. Like
other organizations, Amazon must abide to the law when setting up its warehouses and transporting product.
Laws can either enhance or act as an hinder to successful transportation and warehousing network. The effect
of laws on amazon can be seen in attempt to implement drones in its supply chain. Due to difficulties in
abiding to the law, the implementation of drone-based technology has been slow.

• Another political factor that may affect transportation and warehousing network of amazon is political
stability. It is difficult for the company to establish warehouses in hostile grounds or transport products to
customers in hostile environment.

• The economic stability of a region also affects the transportation and warehousing network of amazon.
Usually, amazon sets up its warehouses store in metropolitan areas where the population is high.
 Technology use in the management of transportation and warehousing network by amazon

• Amazon utilizes technology to manage its transportation and warehousing networks

• Most activities in amazons warehouse is automated. Robots are used in its warehouses to pick and
pack without any human assistance. The use of robots ensures that processes are complete very fast (LeBlanc,
2017).

• In transportation, the company has introduced an application that matches truck drivers and shippers(Kim,
2017). The app enables truck drivers to easily pick and drop packages at Amazon warehouses.

• The company has also managed to utilize drone technology to deliver products to its customers.
 Recommendations for improving transportation and warehousing

• Amazon can improve its transportation and warehousing by focusing on improving its
delivery time and lowering the cost that its charges for delivery of products. Amazon charges
different prices its different delivery options. Normally, it charges higher prices for products
that are delivered within a short-time. For the company to enjoying its growth and
dominancy, it needs to review its delivery charges. Instead of charging different deliver
charges, the company needs to charge a flat rate and the delivery time needs to be uniform all
through.
 References

Alba, D. (2016, March 10). Forget Drones: Amazon Is Going to Fly Its Own Planes. Retrieved from

https://www.wired.com/2016/03/amazon-going-use-planes-move-merchandise/

Amazon. (n.d.). Global Selling Guidance. Retrieved from

https://services.amazon.com/global-selling/global-selling-guide.htm

Bary, E. (2016, December 15). For Amazon, It's About Planes, Trains and Automobiles...Not Drones. Retrieved from

https://www.barrons.com/articles/for-amazon-its-about-planes-trains-and-automobiles-not-drones-1481768710

Investopedia. (2016, August 2). Analyzing Alibaba Vs. Amazon Business Models. Retrieved from

https://www.investopedia.com/articles/investing/061215/difference-between-amazon-and-alibabas-business models.asp

Kim, E. (2017, November 16). Amazon quietly launched an app called Relay to go after truck drivers. Retrieved from

https://www.cnbc.com/2017/11/16/amazon-quietly-launched-an-app-called-relay-to-go-after-truck-drivers.html
LeBlanc, R. (2017, December 1). How Amazon Is Changing Supply Chain Management. Retrieved from

https://www.thebalance.com/how-amazon-is-changing-supply-chain-management-4155324

Price, R. (2017, August 6). Amazon is thinking about building mobile drone stations on trains, vans, and boats.

Retrieved

from http://uk.businessinsider.com/amazon-patents-mobile-drone-stations-on-trains-vans-boats-2017-8?IR=T

Reuters. (2016, March 9). Amazon to start air delivery network with leasing deal. Retrieved from

https://www.reuters.com/article/us-air-transport-sr-amazon-com/amazon-to-start-air-delivery-network-with-leasing-

deal-idUSKCN0WB1LA