Amazon: Friend or Foe

Amazon is making inroads in reinventing and simplifying its sustainable packaging options by using a science-based approach that combines lab testing, machine learning, materials science, and manufacturing partnerships to scale sustainable change across the packaging supply chain. The e-commerce giant has taken steps to improve its packaging selections such as using flexible paper-based options, (paper-based what?) eliminating thin-film plastics, increasing recycled content and reducing plastic. The company also partners with major brands to reduce waste. Teaming up with Procter & Gamble, together they invented the Tide Eco-Box, a concentrated version of Tide’s traditional laundry detergent compressed into a fully recyclable, shipping-safe package. It uses 60% less plastic and 30% less water than a conventional plastic jug, and requires no additional packing materials to ship.

With great power, comes great responsibility. Amazon sets an example as an innovator in many areas of ecommerce. To encourage its sellers to embrace sustainability, Amazon’s Climate Pledge Friendly initiative is a labeling program to help customers to shop for more sustainable products. To qualify for this program, products are required to earn a “Compact by Design,” certification which confirms that products are designed to reduce carbon emissions through increased efficiency and better packaging.

As much as Amazon is a daily household name and its service became essential during the pandemic, there are many who are looking to curb its power. Under antitrust legislation proposed by a congresswoman from Seattle, Amazon could be forced to sell its valuable logistics services division — the network of warehouses and delivery hubs around the country that power quick delivery of online orders.

The proposed bill is aimed at rooting out conflicts of interest and preventing Amazon from enticing sellers to use its logistics services in exchange for preferential treatment on amazon.com. Nearly 85% of Amazon’s biggest sellers use its Fulfillment by Amazon service, paying the online retailer fees for warehouse storage, packing and shipping of their products.

The bill, Ending Platform Monopolies Act, was passed 21-20 by the House Judiciary Committee on June 24. The next step would move the bill to the full House floor, and at this time, it is unclear if this will actually occur.

Amazon’s Climate Pledge has committed to reaching net-zero carbon emissions by 2040, making 50% of all shipments net-zero carbon by 2030, and powering operations with 100% renewable energy by 2025. While Amazon was the world’s largest corporate purchase of renewable energy in 2020, it’s still growing Amazon Air with a fleet of more than 85 planes, including 11 Boeing jets by the end of 2022. The company’s logistics business is expected to be worth as much as $230 billion in 2025. These add to the growing fear that Amazon poses an increasing threat to UPS and FedEx as well as the U.S. Postal Service.

What does this mean for you? Better relationships with your Carriers and increased transparency will position your company for the apparent changes ahead. LJM Pricing Experts and Business Analysts, who have more than 100 years of combined experience in the Carrier negotiation business, analyze, track and recommend implemental solutions based on Amazon’s influence in the shipping industry.

 

 

  1. October 2020 report from the House Judiciary Committee’s antitrust panel.