Amazon has released a trial version of its new digital freight brokerage platform that is threatening to turn the trucking industry on its head.
Amazon has quietly launched the beta version of their freight brokerage platform at freight.amazon.com. The website offers few details about the platform but promises to allow users to “tap into the scale of Amazon as we extend our carrier network to give you best-in-class service at great rates.”
For now, the 53′ dry van full truckload service is only being offered in Connecticut, Maryland, New Jersey, New York, and Pennsylvania.
The platform cuts out freight brokers entirely, connecting shippers to the already-established nationwide network of third party carriers affiliated with Amazon. This allows Amazon to sell access to their logistics network at no mark-up cost and will reportedly undercut current market pricing by 26% to 33%, according to Yahoo Finance.
Amazon denies reporting that they are undercutting market pricing:
“We work with many line-haul service providers in our transportation network and have long utilized them to carry loads for Amazon. This service, intended to better utilize our freight network, has been around in various forms for quite some time. The analysis suggesting dramatic undercutting of pricing is false.”
Amazon’s new digital platform will compete with similar freight brokerage services like C.R. Robinson and Uber Freight.
Amazon’s business strategy in other fields has been to operate on little to no profit margin in order to undercut competitors with the option to raise rates and turn a profit once they’ve driven other companies out of business.