As Amazon.com Inc targets traditional brokerages that match shippers with truckers, it is also battling with a bevvy of startups, Uber Freight.
“The analysis suggesting dramatic undercutting of pricing is false,” Amazon said in a statement.
The company has been investing billions of dollars to build an air, sea and land shipping network to contain its own costs.
Analysts said its fight for a slice of the more than $700 billion U.S. companies spend on trucking each year could pose a long-term threat to leading truck brokers like C.H. Robinson Worldwide and United Parcel Service.
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“Not all customers will be looking to turn over their confidential supply chain data to Amazon, particularly larger players in the retail and consumer products businesses,” Cowen & Co analyst Jason Seidl said in a note.
Investors are betting that technology can transform the fragmented truck brokerage business that ran for decades on personal relationships and telephone calls.
They’ve poured millions of dollars into startups like Uber, Transfix and Convoy – the latter of which raised nearly $270 million from Bezos and other backers.
Anheuser-Busch InBev, Colgate-Palmolive Co and other companies have kicked the tires on those upstarts, which aim to dominate by building a massive network of shippers and drivers.
Three shippers, who spoke on the condition of anonymity, said Uber Freight is pricing aggressively as it fights for a foothold and its parent Uber Technologies racks up massive losses.
David Uncapher, Owens Corning’s director of global transportation until late last year, said Convoy’s prices were 5 to 15 percent lower than the company’s other brokers, which had far greater geographic reach.
Skeptics said startups don’t have a lock on new technology and noted that Coyote Logistics, the truck brokerage UPS bought for $1.8 billion in 2015, did a better-than-expected job of holding down the delivery company’s costs during the 2018 holiday shipping surge.
(From Agency)