Amazon takes on UPS and FedEx – and catches Theresa May’s eye

Amazon takes on UPS and FedEx – and catches Theresa May’s eye

Amazon’s ambitions in the delivery sector finally reveal what Jeff Bezos has been building in plain sight: a global hyper-company. No wonder Theresa May is watching, says Chris Middleton.

Connected business behemoth Amazon is gearing up to launch its own delivery service “in the coming weeks”, according to a report in The Wall Street Journal.

The service, reportedly to be known as Shipping with Amazon (SWA), will pitch the company against the likes of UPS and FedEx in the US, by not only delivering its own parcels, but also other people’s.

SWA will be trialled in the Los Angeles area, and initially be limited to companies that sell goods though Amazon’s platform. But the goal is certainly global.

Make way for the hyper-company

The long-term ambitions of a company that has built an automated global retail, fulfilment, and distribution platform – and a supporting network – should now be getting clearer.

Amazon can no longer be described as a retailer; it has been building an entire ecosystem – in effect, a self-contained global economy – that pitches it against the likes of Google, Alibaba (and its Cainiao logistics network), and Apple as a data-fuelled hyper-company.

Amazon learns its customers’ preferences and competes to offer them the best experience across physical, mobile, and digital channels. More, it creates, publishes, and streams its own media content. Recently, it has even entered the healthcare market, along with food deliveries, and it wants the keys to your home.

In short, it is becoming clear that delivery is what Amazon is really about, whether it is by cardboard box or data packet, or via drone, truck, or cable.

Amazon’s Web Services platform is part of a globally interconnected business that, via its smart home hubs, tablets, and other devices, now sits in the living rooms, offices, and pockets of millions of people – and behind their smart TVs too.

Success… come what May

Jeff Bezos’ company, and its Chinese counterpart Alibaba, have certainly caught the eye of at least one person: British Prime Minister Theresa May. According to a report in Bloomberg, “British officials are studying how Amazon helps small UK business export to countries with restrictive customs rules,” it says.

May is said to be watching Amazon closely in the run-up to Brexit, and met Alibaba founder and chairman Jack Ma in Davos in January, and again this month in Beijing. However, the conversation won’t have been helped by Alibaba’s plans to build a distribution centre in France, suggests Bloomberg.

Internet of Business says

The prospect of the UK becoming a smart, connected business modelled on Amazon is certainly an intriguing one, but it is unlikely to be made real by an antiquated civil service, a government that has mired its own digital ambitions in a bureaucratic swamp, and UK policy makers having their heads in the 19th Century even as their shoes are being polished in the 21st.

Another challenge is that large corporations find it easier – and cheaper – to trade with countries that are part of a single bloc, and to locate their businesses within them, than to set up dozens of piecemeal deals. This is almost certainly why Ma wants to locate his new distribution hub in France, rather than the UK.

But both Amazon and Alibaba probably admire the UK’s ambitions to surveil and own its citizens’ private data – even if, as tech providers, they would stand against May’s anti-encryption rhetoric.

Nevertheless, the question on May’s lips is how a hyper-company can build a borderless international trade organisation, while a country cannot.

But this rather overlooks the fact that the UK is currently in the process of leaving a borderless international trade bloc, along with a customs union that is snapping up new trade agreements faster than the UK can burn them.

Read more: PAL value chains: how IoT transforms manufacturing and supply

Read more: Success stories: Five smart factories – and what you can learn from them