The end of the supply chain as we know it?

Global e-commerce is leading the biggest shake up in international shipping since containerisation, with Amazon and Alibaba creating the biggest revolution in shipping for 60 years, and it will have a major impact on global supply chains. That’s the message David Jinks MILT, Head of Consumer Research at delivery experts ParcelHero told the Digital Ship CIO Conference at the Waldorf Hotel on February 28th.

“Shipping lines will be forced to integrate with Amazon and Alibaba or be submerged by the digital revolution. A change in global supply chains even greater than the introduction of containers in the 1950s is underway, and shipping lines that don’t adapt to the new e-commerce revolution will go under in the same way as the many long-established companies that failed to adapt to containerisation.”

David said: “The prime need for Amazon to entirely integrate its supply chain means it has already revolutionized its land and air operations – it now delivers 80% of its own parcels in the UK and flies over 40 Boeing 767 Amazon Air jet freighters. It has the crucial supply chain from China to the West firmly in its sights. At the same time the Chinese e-commerce giant Alibaba, whose volumes make Amazon look like a minnow, is fast integrating its deliveries to the US and Europe.’

David warned: “As freight forwarders and shipping agents become obsolete under the new digitised retail supply chains, shippers must either integrate with Fulfilment by Amazon and Alibaba’s One Touch booking programme, or be overwhelmed by the tsunami sweeping over the shipping industry.’

David said shipping lines must either adapt to survive – as Maersk is attempting by integrating with Alibaba and introducing its revolutionary Captain Peter App to track container loads – or face the prospect of Amazon launching its own rival fleet; it already has its own freight forwarding service.

“This digital revolution will result in Internet of Things connected machines placing orders automatically with Chinese manufacturers, and integrating with autonomous ships like the soon-to-be-launched Yara Birkeland. It’s sad but true that those shipping lines, freight forwarders and agents who still favour personal contact and the phone will be left behind as the pace of integration increases.”