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Amazon expands warehouses in UK

Amazon is set to open its 13th fulfillment center in the UK at Tilbury, Essex (England), according to Internet Retailer.

The new fulfillment center will utilize Amazon Robotics technology, which has been shown to decrease the amount of time it takes to process orders. In addition, the technology will reduce the amount of space needed to warehouse goods. The fulfillment center is scheduled to open in 2017 and will employ roughly 1,500 people, bringing the total number of Amazon UK employees to 15,500.

The new fulfillment center will allow Amazon to expand its product selection through its Fulfillment by Amazon (FBA) service. Third-party sellers on Amazon can elect to fulfill their orders through FBA, which means that Amazon will store their products in one of several Amazon fulfillment centers and will then pick, pack, ship, and provide customer service for the respective products once an order is placed. Through the implementation of Amazon Robotics, the new fulfillment center will be able to store 50% more items per square foot.

Opening a new fulfillment center could pave the way for more third-party sellers to participate on its online marketplace. With its latest fulfillment center, Amazon has the potential to store additional products for not only existing third-party merchants, but also for new entrants.

However, the recent rise of Amazon third-party sellers has led to a price war among sellers, forcing them to lower prices in order to maintain sales. Amazon’s third-party merchants may look to smaller online marketplaces, such as Etsy, to stay competitive. This could have negative repercussions, though, given the immense number of online shoppers who currently use Amazon.

The parcel delivery industry — a segment of the shipping sector that deals with the transportation of packages to consumers — is booming thanks to e-commerce growth, and players outside the industry want a piece of the pie. 

Evan Bakker, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on the future of shipping that looks at efforts by Amazon, Alibaba, and Walmart to handle more of their own shipping and concludes that big retailers are well positioned to disrupt the parcel industry.

Here are some of the key points from the report: 

• Transportation and logistics could be the next billion dollar opportunity for e-commerce companies. The global shipping market, including ocean, air, and truck freight, is a $2.1 trillion market, according to World Bank, Boeing, and Golden Valley Co.
• There is much at stake for legacy shipping companies, which have seen a boom in parcel delivery as e-commerce spending has risen. Twenty different partners currently share the duties of shipping Amazon's 600 million packages a year, with FedEx, USPS, and UPS moving the most.
• Amazon, Alibaba, and Walmart have so far focused on building out their last-mile delivery and logistics services but are increasingly going after the middle- and first-mile of the shipping chain. 
• Amazon has already made major moves across each stage of the shipping journey. It launched same-day delivery service, which it handles through its own fleet of carriers, cutting out any third-party shippers. The company also recently began establishing shipping routes between China and North America.
• Walmart's interest in expanding its transportation and logistics operations is almost purely related to cost-savings. It's begun leasing shipping containers to transport manufactured goods from China and is making greater use of lockers and in-store pickup options to cut down on delivery costs.
• Alibaba has begun leasing containers on ships, similar to Amazon's Dragon Boat initiative. This means that Alibaba Logistics can now facilitate first-mile shipping for third-party merchants on its marketplace.

In full, the report:

• Sizes the market for the shipping industry.
• Explains how the industry operates in broad terms.
• Suggests why major e-commerce retailers should disrupt the space.
• Outlines the shipping initiatives of Amazon, Walmart, and Alibaba.
• Concludes how these moves might impact traditional carriers.

Interested in getting the full report? Here are two ways to access it:

1. Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally.
2. Purchase & download the full report from our research store. 

The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the future of shipping.

(SOURCE)