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Industrials

UPDATE 1-Amazon China approved to provide ocean freight services

(Rewrites, adds background on filing, Amazon’s logistics business)

SAN FRANCISCO, Jan 14 (Reuters) - Online retailer Amazon.com Inc’s China division has registered as an ocean freight forwarder, according to the U.S. Federal Maritime Commission, a move which allows it to coordinate cargo shipments between China and the United States.

The registration is the latest indication that the world’s largest online retailer plans to expand its logistics business to cut costs for its own retail business and potentially provide third-party logistics services to other industries.

Its new status as a freight forwarder, or “non-vessel operating common carrier” means the Amazon unit can subcontract carriage of cargoes to a ship operator while it takes on legal liability and takes care of customs documentation.

Amazon is already negotiating a deal to lease 20 jets to start its own air-delivery service in the United States, the Seattle Times reported last year. The retailer has also introduced its own truck trailers and started a program last year that uses a fleet of on-demand drivers to deliver packages.

The Federal Maritime Commission, a U.S. government agency that regulates the U.S.-international ocean transportation system, said on Thursday a business named Beijing Century Joyo Courier Service Co Ltd, with the trade names Amazon China, Amazon.CN and Amazon Global Logistics China, was registered in its database to provide ocean freight services.

Amazon China submitted its registration request on Nov. 9 last year, submitting various documents and posting a bond, the commission said on Thursday. The request was reviewed and registered on Nov. 13. It is the entity’s first registration, the commission said.

Ryan Petersen, who heads Flexport, a San Francisco-based licensed freight forwarder, first wrote about Amazon’s registration on his company blog on Thursday.

“Amazon’s ocean freight services will be far more attractive to Chinese sellers than to American buyers. Chinese suppliers would love direct access to Amazon’s vast American customer base,” wrote Petersen, adding that it could mean even more price pressure on U.S. merchants that already sell goods imported from China to customers through Amazon’s site.

An Amazon spokeswoman declined to comment. (Reporting by Mari Saito; Editing by Stephen R. Trousdale and Bill Rigby)

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