Amazon launches dedicated supply chain unit to compete with global logistics giants

Amazon has officially launched Amazon Supply Chain Services (ASCS), a new division that extends its internal logistics capabilities to businesses outside its own marketplace ecosystem. The announcement marks a strategic shift as the technology giant opens its full portfolio of freight, distribution, fulfillment, and parcel shipping services to companies of all types and sizes. Modeled after the success of Amazon Web Services, ASCS represents a standalone offering designed to serve external industries including healthcare, automotive, manufacturing, and retail.

The new service is being introduced with a roster of high-profile initial clients, including Procter & Gamble, 3M, Lands' End, and American Eagle Outfitters. For manufacturers such as 3M and Procter & Gamble, Amazon will manage freight operations shipping products from manufacturing sites to distribution networks. Conversely, for retailers like Lands' End and American Eagle, the company will handle order fulfillment directly to end customers. This diversification of use cases demonstrates the flexibility of the network, which has been built to support complex supply chain requirements beyond simple e-commerce transactions.

This expansion positions Amazon to compete directly with established global logistics providers, including the US Postal Service and the DHL Group. The company has historically reduced its reliance on traditional carriers by constructing a comprehensive network of warehouses, aircraft, trucks, and delivery vehicles globally. By leveraging this infrastructure, Amazon aims to challenge incumbents in a global third-party logistics market estimated to be worth over $1.3 trillion. Peter Larsen, vice president of ASCS, described the sector as a "very large opportunity" for the firm.

The move builds on two decades of Amazon selling fulfillment services to third-party sellers on its retail marketplace, a practice that has made it the world's largest third-party logistics company by volume. The company has long viewed its supply chain as a core differentiator that enables fast, dependable delivery unmatched by competitors. While the service has previously been limited to marketplace sellers, ASCS removes that barrier, allowing any business to access the same proprietary tools that have driven Amazon's core shopping experience.

Despite the clear strategic intent, specific details regarding pricing models and service level agreements for non-marketplace clients have not yet been detailed in available reports. Furthermore, the full extent of the initial rollout beyond the four named signatories remains unknown at this stage. Nevertheless, the launch signals a significant disruption to the traditional logistics landscape, potentially impacting the financial stability of established carriers like the US Postal Service as Amazon scales its external operations.