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Amazon looks to deliver with 3rd-party logistics market

BENGALURU: Amazon India has created a dedicated platform for onboarding third-party logistics players and staffing agencies which power the Amazon delivery stations.Through the platform, run by Amazon Transport Services (ATS), the online marketplace could optimise cost of delivery and gain greater reach.

A similar logistics marketplace exists at Amazon’s operations in the US, UK, Japan, Canada and Mexico, where the company provides its technology to partner companies.

“ has been made for the India business to bring all the delivery service partners on one single platform. The site has been live for a few months now,” said an Amazon India spokesperson, in response to ET’s request for comment. The platform will be managed by ATS, which will screen the third-party logistics (3PL) companies applying to the platform. This points to a shift in the strategy from building a scalable network to creating a frugal logistics system serving multiple regions.

Adding on new partners, especially in the last mile, is critical for catering to demand, say experts. “We partner with more than 160 service partners delivering across 250 Tier II & III locations across the country. There are more than 100 Amazon delivery stations and we partner with many staffing agencies to hire the needed manpower for these locations. We are in the initial phase of migrating our existing partners while onboarding new partners onto the platform,” said the company spokesperson.

The marketplace also works with external carrier partners including Blue Dart , FedEx ,DHL and India Post . “Having a combination allows us to ensure large coverage and great customer service. We are unable to share a percentage split in terms of delivery volume,” said the spokesperson.

For the US platform, Amazon provides a minimum guaranteed volume which ensures a fixed income for the 3PL partners.

Moving to a marketplace model has multiple advantages in terms of flexible network and bringing in efficiency at low cost. Alibaba-backed Cainiao also works on a similar platform to have 3PL players to fulfill the logistics requirement for the Chinese Internet giant.

Building a marketplace of third party logistics partners provides flexibility, said Manish Saigal, managing director at consultancy firm Alvarez & Marsal India. “The marketplace can take advantage of a small local player to serve orders in areas where they do not have the capacity. This player would not have been onboarded and partnered without the marketplace. It also gives them the benefit of dynamic pricing.”

But India cannot be compared with the US as most of the online marketplaces were built to fill the initial gap where 3PL players did not match the standards and service level agreements required by the marketplaces, Saigal said.



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