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| Amazon has several ways to avoid supply chain crises |
Amazon has been renting cargo ships, manufacturing containers, and chartering flights for many years in order to better manage the complex cargo flights ordered online.
While many retailers now fear supply chain chaos, Amazon's costly first steps have avoided long waits for berths and available labor at the two busiest ports in Long Beach and Los Angeles in the US.
By chartering cargo ships to transport goods, Amazon can control the location of goods and avoid the busiest ports.
However, since January 2021, the number of out-of-stock items on Amazon has increased by 14% and the average price has increased by 25%.
The consumer will feel that the price of what he is buying is higher and when the transportation cost increases it is borne by the consumer.
Amazon spends a lot of money to control as many shipments as possible. Its spending on shipping was more than $61 billion in 2020, more than $38 billion in 2019.
The company now ships 72% of its packages, up from less than 47% in 2019. It is also leading the first phase of the transportation journey by making its 53-foot container in China.
There is a shortage of containers and long waiting times. Prices have also fallen from under $2,000 before the pandemic to $20,000 today.
Amazon makes its own containers
In the past two years, the company has produced perhaps 5,000 to 10,000 of these containers. When these containers are brought into the United States, they will be used in local and rail systems after unloading. It does not have to send them back to Asia like everyone else.
When constructing the container, they basically make sure that the equipment is available to them. Amazon first registered with the Federal Maritime Commission in 2015, which was the first sign of its exploration of the shipping business.
In 2017, Amazon began operating as a global shipping company through a Chinese subsidiary. This helped move goods across the ocean for its Chinese sellers who pay to be part of the Fulfilled by Amazon program. The company internally called this project the Dragon Boat.
The actual purpose of these ships when they were built was not containers. But Amazon has figured out how to turn some of these versatile ships into containers.
For some products with higher profit margins, Amazon avoids ports by leasing long-haul planes. These aircraft can transport smaller quantities of cargo directly from China to the United States more quickly.
One of the modified Boeing 777 aircraft can carry 99,790 kg of cargo. According to capacity estimates, Amazon charter small container ships have a capacity of 180 times their capacity. The capacity of the largest cargo ship is more than 3,600 times that of the aircraft.