12.23.2015

Amazon's pioneering work in online retail has helped transform US retail.  Along the way, the company has depended upon -- and benefited -- United Parcel Service.  But there is growing concern at the online retailer that the current UPS logistics network is unable to adapt to the demand-pull revolution sweeping retail.

According to the Wall Street Journal: "At Amazon, plans to handle more of its own parcels have accelerated over the past two years, according to current and former executives. Amazon also fears that UPS’s hub-and-spoke system—moving a package from shipper to sorting hub to brown van to your home—is growing obsolete, according to the executives. So the retailer is building regional distribution and package sorting centers, while adding thousands of truck trailers. It is even trying delivery by newspaper carriers."

Technological advancements allowing greater supply chain visibility and rapid adaptability to demand may be undermining the long-time comparative advantage of the hub-and-spoke strategy, allowing for a greater fluidity among and between more and smaller nodes.


No comments:

Post a Comment