Discussion: Global Logistic/Transportation
Amazon is losing money in logistics (see link). You can do an information search and find out they have been losing money on logistics for a number of years now.
Amazon Lost $7 billion in 2016 – Geekwire
The class has been divided into 5 different groups. Each student has been assigned to one group and only one group. The groups are: Ocean Freight Transportation, Air
Freight Transportation, Semi Truck transportation, Local Delivery and Logistics Strategy. These are the same primary modes of transportation Amazon is investing in
currently. I did not includes Drones on the list, they are only test phase or in very limited commercial use for delivery services at this time.
Each of the transportation mode groups will list the advantages and disadvantages to Amazon of investing in their one mode of transportation. For example the Air
Freight Transportation Group will make a list of the advantages and disadvantages to Amazon of investing in Air Freight capabilities. The Ocean transportation group
will provide a list of the advantages and disadvantages of Amazon investing in ocean freight capabilities. The local delivery group will do the same for local delivery
services and the semi truck group will do the same for semi trucks (large tractor-trailer trucks with trailers typically 53 feet long in the USA).
The logistics strategy group will decide on which one of the transportation modes is most important for Amazon to invest in. This group will discuss why they think
this one mode of transportation is more important than all the others to Amazon.
The purpose of this exercise is explore how logistics is being used as a strategic tool by a company that is disrupting the retailing industry across the globe. It
will help us become familiar with the content in Chapters 11-13 in our textbook in what I hope is a interesting learning experience. Over the last few decades the
logistics industry has become increasingly consolidated. In the parcel business we have 4 dominant operators USPS, FEDEX, UPS, DHL (these are considered local delivery
operations). The ocean container industry is going through a dramatic consolidation now, as is the semi trucking industry).
While these industries are undergoing consolidation all of a sudden, Amazon, and I believe Alibaba also, are making huge investments in logistics. Why are they
attempting to enter into these consolidating industries is a good question for students of business to research. We will take some basic steps and look at the
advantages and disadvantages of different modes of transportation and a brief look at how they might fit for Amazon. I have no more insights than you have, we are all
learning by watching what is happening.
I have created 5 discussion boards, one for each group. I will also send an email to you with the group you have been assigned to randomly by D2L. Once you receive the
email on Monday Feb 27, feel free to contact each other or make individual postings. Make sure to review what each other has posted in your group. I want to see at
least one advantage or disadvantage from each person in the group. So don’t try and list everything you can think of, and don’t just retype what another member of your
group has already posted. I want to see that each student is actively learning and making a contribution. This is a discussion worth 5 points, it is not an individual
research paper. Sharing with each other in the group is an important part of learning.
Think of your group as advising the Amazon management team as to the advantages and disadvantages of your mode of transportation to Amazon. The Logistics Strategy also
only needs to focus on one mode of transportation, they need to recommend which one of the modes should be a top priority for Amazon.
Local Delivery Transportation
List the advantages and disadvantages to Amazon of investing in local delivery transportation capabilities.
We decided to do it individually. So one of my group member post this:
An advantage for Amazon investing in local delivery capabilities would be that they are able to accommodate fast delivery that Amazon guarantees. By investing in local
delivery capabilities Amazon would be able to control their delivery times, increasing the speed of deliveries when needed. This is important to a company like Amazon,
that offers 2 day and even 2 hour free shipping to its Amazon Prime members