Amazon is looking to strengthen its presence in the rail freight space in the US by opening the capacity of its fleet of 53-foot intermodal containers to other shippers.

The e-commerce giant’s Amazon Freight unit is bringing a train-borne logistics offering to the market, which puts it in direct competition with major US players in the sector, among them J.B. Hunt and Hub Group, as well intermodal marketing companies.

Third-party provider

The move is in line with Amazon’s ongoing strategy to become a fully-fledged third-party logistics services provider to control more aspects of the supply chain, having been disappointed with external contractors, especially during periods of peak consumer demand.

This has entailed the creation of its own airline, operating its own airport hubs, having a non-vessel operating common carrier licence for ocean transport and having a fleet of thousands of truck trailers.

In 2019, Amazon acquired a batch of 250 containers, and the fleet has since grown to a total of more than 5,000 boxes, according to a US media report, with activity focused on the country’s West Coast.

Competitive offering

Chris Oliver, senior manager of Amazon Freight Intermodal, set out the company’s rail freight offering: “With intermodal for external customers, we really started talking about how to go big because of the product that we had. We could compete on cost, speed, capacity and performance.

“You don’t have to have a relationship with a third party carrier or a railroad to be able to use the infrastructure and the capacity that we have. It is a full end-to-end solution for every customer. We help coordinate the drop-off of the container to be loaded. We’ll coordinate the pickup of that container and transportation to rail and provide oversight, using the technologies we have on every container and within our relay suite of products.”

Sustainable logistics

Matthew Thomas, also a senior manager at Amazon Freight Intermodal, noted: “With Amazon, you’re getting access to all the technology, all of the capacity, and everything that makes Amazon Amazon. When you engage with Amazon Freight, we’ll walk with you from the beginning to understand exactly what you need and will help build that transportation solution for you.”

Amazon’s push into rail also ticks the box on sustainable logistics solutions. “The climate pledge is Amazon’s commitment to getting to zero net carbon emissions by the year 2040. Intermodal helps us to get there. You are making a choice to move something and not just in a more cost-effective way. You’re moving a product in a much more sustainable way as well. We have an opportunity to find shippers and sell them the space that we have in our containers. Now you get access to the Amazon network.”

Rail an ‘optimal choice’

In Europe, where in 2021 Amazon supported the EU’s European Year of Rail, the company is exploring a variety of transportation innovations to make its deliveries more sustainable: alternative fuel vehicles, improving routing technology, increasing efficiencies in our network planning as well as expanding a variety of alternative modes of transportation to reduce the emissions from road freight.

Speaking in October last year, Boris Timm, who at the time was head of Intermodal, Amazon Europe, with responsibility for growing the online retailer’s use of rail across Europe, said: “We run a pan-European logistics network and have buildings across Europe. So rail is an optimal choice for Amazon when moving goods over longer distances.

“We generally look for rail connections as close to our buildings as possible, as well as the combination of rail with other more sustainable transportation means, like alternative fuel vehicles or short sea routes”.

Amazon is working with carrier partners to expand its European rail network and runs dozens of routes connecting destinations across Europe. In 2020, it transported three times more loads between its hubs using rail than previously. The company predominantly uses rail in Europe for inventory transfers between fulfilment centres.