Carriers Competing with Data

May 6, 2021


An emerging race is underway between Amazon, FedEx, and UPS, and it's all about data. During last week's earnings call, Amazon's CFO, Brian Olsavsky, noted the importance of "controlling the whole flow of products from the warehouse to the end customer." As an example, Olsavsky cited where Amazon once would hand off a large batch of orders to a third party once a day but now, through what it describes as a "continuous flow process, orders leave warehouses five or six times a day going through the middle mile and then to final delivery, either through its drivers or its delivery service partners."

In another example, Olsavsky said that Amazon has "perfect information between the order placement allocation to warehouses," which allows them to extend cutoff times.

"Perfect information" is driving more efficient operations and, thus, faster deliveries for shippers and for the small-to-medium-sized business that sells on Amazon's platform, which means leveling the competitive playing field against larger businesses.

Amazon knew this early on as it built its online platform. For the first quarter, 55% of products sold on Amazon were from third-party sellers. That's up from 52% in 2020 and 44% in 2015, according to Digital Commerce 360.

Small-to-medium-sized businesses are among FedEx's and UPS's fastest-growing customer segments, and to keep them within their folds, FedEx and UPS are sharing data similar to Amazon.

On April 27, for example, Adobe announced it would integrate FedEx's online platform, ShopRunner, with Adobe Commerce. According to Adobe, the integration will give Adobe merchants access to FedEx post-purchase logistics intelligence, which will help them drive demand, reduce cost and gain customer insights. In addition, Brands and merchants shipping with FedEx will also benefit from FedEx post-purchase logistics intelligence to "help create a more efficient and reliable experience for brands, merchants, and their customers."

Meanwhile, on the same day as the Adobe announcement, UPS' Ware2Go launched a free application to help e-commerce merchants with fulfillment planning. The application, NetworkVu, analyzes merchant sales and transit data using machine learning to recommend ideal warehouse placements. This is to maximize delivery speeds within ground networks and control costs.

Last year, Ware2Go introduced FulFillmentVu, which combines a warehouse management system, an order management system, and a transportation management system.

Many technology options are available in the market for small-to-medium-sized businesses to optimize logistics and transportation networks, so that they and other shippers will need to weigh the benefits of data capabilities and costs from Amazon, FedEx, and UPS.

 


ABOUT SPEND MANAGEMENT EXPERTS

Spend Management Experts provides strategic guidance to optimize your supply chain. Using cost modeling technology and market intelligence, we help companies with their transportation, distribution, and fulfillment spend. Often large shippers can reduce their spend across the supply chain by 20% or more. We specialize in reducing distribution costs, increasing efficiencies, dynamic reporting, greater budgeting, and forecasting accuracy, and optimizing supply chain execution. We leverage our proprietary models to identify savings and build negotiation strategies based on data and business cases. As industry experts, our fresh approach provides clients with straightforward details on exactly how savings are derived. Spend Management Experts is your competitive edge, delivered.

Connect with Spend Management Experts on TwitterLinkedIn, and the Spend Management Experts blog.

Share this article:

Blog Posts

  • Categories

Carriers Competing with Data

May 6, 2021


An emerging race is underway between Amazon, FedEx, and UPS, and it's all about data. During last week's earnings call, Amazon's CFO, Brian Olsavsky, noted the importance of "controlling the whole flow of products from the warehouse to the end customer." As an example, Olsavsky cited where Amazon once would hand off a large batch of orders to a third party once a day but now, through what it describes as a "continuous flow process, orders leave warehouses five or six times a day going through the middle mile and then to final delivery, either through its drivers or its delivery service partners." In another example, Olsavsky said that Amazon has "perfect information between the order placement allocation to warehouses," which allows them to extend cutoff times. "Perfect information" is driving more efficient operations and, thus, faster deliveries for shippers and for the small-to-medium-sized business that sells on Amazon's platform, which means leveling the competitive playing field against larger businesses. Amazon knew this early on as it built its online platform. For the first quarter, 55% of products sold on Amazon were from third-party sellers. That's up from 52% in 2020 and 44% in 2015, according to Digital Commerce 360. Small-to-medium-sized businesses are among FedEx's and UPS's fastest-growing customer segments, and to keep them within their folds, FedEx and UPS are sharing data similar to Amazon. On April 27, for example, Adobe announced it would integrate FedEx's online platform, ShopRunner, with Adobe Commerce. According to Adobe, the integration will give Adobe merchants access to FedEx post-purchase logistics intelligence, which will help them drive demand, reduce cost and gain customer insights. In addition, Brands and merchants shipping with FedEx will also benefit from FedEx post-purchase logistics intelligence to "help create a more efficient and reliable experience for brands, merchants, and their customers." Meanwhile, on the same day as the Adobe announcement, UPS' Ware2Go launched a free application to help e-commerce merchants with fulfillment planning. The application, NetworkVu, analyzes merchant sales and transit data using machine learning to recommend ideal warehouse placements. This is to maximize delivery speeds within ground networks and control costs. Last year, Ware2Go introduced FulFillmentVu, which combines a warehouse management system, an order management system, and a transportation management system. Many technology options are available in the market for small-to-medium-sized businesses to optimize logistics and transportation networks, so that they and other shippers will need to weigh the benefits of data capabilities and costs from Amazon, FedEx, and UPS.  


ABOUT SPEND MANAGEMENT EXPERTS

Spend Management Experts provides strategic guidance to optimize your supply chain. Using cost modeling technology and market intelligence, we help companies with their transportation, distribution, and fulfillment spend. Often large shippers can reduce their spend across the supply chain by 20% or more. We specialize in reducing distribution costs, increasing efficiencies, dynamic reporting, greater budgeting, and forecasting accuracy, and optimizing supply chain execution. We leverage our proprietary models to identify savings and build negotiation strategies based on data and business cases. As industry experts, our fresh approach provides clients with straightforward details on exactly how savings are derived. Spend Management Experts is your competitive edge, delivered. Connect with Spend Management Experts on TwitterLinkedIn, and the Spend Management Experts blog.

Share this article:

Blog Posts

  • Categories