Amazon going direct to railroads with intermodal business

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SEATTLE — Amazon has joined Walmart in fielding a fleet of 53-foot containers for intermodal service, according to the Journal of Commerce.

Amazon will break convention by dealing directly with railroads, bypassing intermodal marketing companies. Walmart’s relationship with railroads is both direct and through the marketing companies.

Amazon recently established a third-party logistics organization and has been rapidly moving into controlling more aspects of the supply chain, including operating its own aircraft, having its own airport hub, functioning as a non-vessel operating common carrier for ocean transport from China, and having a fleet of thousands of truck trailers.

The online retailer’s move into transportation apparently reflected its frustration with hired carriers’ inability in recent years to meet holiday deadlines.

Amazon has a tendency to eventually compete with its suppliers and this summer FedEx declined to renew air and ground contracts with Amazon. Earlier in the year, FedEx had issued a terse statement indicating Amazon traffic made up a very small portion of its business.

FedEx’s decision stemmed from Amazon’s demands, its growing role as a competitor, and low margins, according to Fortune.

Amazon has been heavily into intermodal, mainly on BNSF Railway, but so far only has about 250 of its own marked containers, according to the Journal of Commerce, which estimates Walmart’s identified containers number about 2,000.

Both Amazon and Walmart are concentrating their identified containers on the West Coast.

NEWSWIRETrains News Wire

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