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May 12, 2014

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INTERNATIONAL MARITIME 44 THE JOURNAL OF COMMERCE www.joc.com MAY 12.2014 By Grace Lavigne WITH NEW INVESTMENT in a parcel delivery company, Amazon not only is entering the French market, but also is sending a strong signal that the e-commerce giant wants to take greater control of last-mile shipping to customers. The S eat t le -ba s e d compa ny h a s acquired a 25 percent stake in Colis Privé, a parcel delivery company that competes with France's state-owned La Poste, as well as TNT, DHL, UPS and FedEx, according to TechCrunch. Terms of the investment were not disclosed. The deal will help Amazon better control its distribution and cut costs without build- ing a network from scratch, especially because one of Colis Privé's two depots is near one of Amazon's largest French ware - houses, TechCrunch repor ted. A ma zon ships approximately 50 million packages a year in France, accord- ing to Le Journal du Net. France recently passed an "anti-Ama- zon" law, which forbids the e-commerce company from offering free shipping on books, although the European Union could block that legislation. Colis Privé, which delivered 25 million packages in 2012, TechCrunch said, repre- sents another step in Amazon's strategy to control more of its deliveries internationally. In March 2014, Amazon acquired a 4.2 per- cent stake in U.K.-based delivery firm Yodel, The Guardian reported. The e-commerce company also recently built up its Kindle businesses in Russia and Brazil and began testing "mom-and-pop-shop delivery" in India. In the next two years, Amazon is expected to use its own logistics network to deliver nearly every product sold on its Indian portal, according to The Economic Times. The world's largest online retailer also is taking steps to control deliveries in its home market, testing its own last-mile delivery net- work in San Francisco, Los Angeles and New York. Trucks with Amazon packages will be driven by Amazon-supervised contractors to shoppers' doors, according to The Wall Street Journal. The move will help Amazon control the shopping experience and contain shipping expenses. This could be bad news for the U.S. Postal Service, FedEx and UPS, which cur- rent ly deliver t he majority of Amazon's packages, and a chal - lenge to Wal-Mart, eBay a nd G oog le, which also are testing deliveries, The Wall Street Journal said. The online retailer also is reviewing a lease for a site on Trea- sure Island in San Francisco Bay to house trailers and delivery trucks that could be dispatched into San Fran- cisco, The Wall Street Journal reported. Last year, Amazon announced Prime Air, a science fiction-like goal to deliver packages to customers in 30 minutes or less using unmanned aerial vehicles, or drones. A mazon's shipping expenses have grown as a percentage of sales each year since 2009, according to securities filings. Amazon reported first quarter profit of $108 million, up from $82 million in the same period last year. With sights set on delivery, Amazon could turn into a full-blown logistics com- pany down the road. JOC Contact Grace M. Lavigne at glavigne@joc.com and follow her on Twitter: @Lavigne_JOC. AMAZON DELIVERS The e-commerce giant is building an overseas portfolio with an eye toward controlling last-mile distribution SHIPPERS BEWARE Trans-Pacific carriers prepare to impose congestion surcharges in event of ILWU-related work stoppages HAPAG-LLOYD'S CUSTOMERS HAVE been told to prepare for what could be large conges- tion surcharges on shipments to and from the U.S. if work stoppages occur during West Coast longshore contract negotia- tions this summer. Negotiations between the International Longshore and Warehouse Union and the Pacific Maritime Association are set to begin this week, less than two months before the contract expires on July 1. Hapag-Lloyd said it would be prepared to implement a congestion surcharge beginning on June 10 if conditions at North American ports gener- ate additional costs for its operations. Hapag-Lloyd is one of at least 12 car- riers to file tentative plans for congestion surcharges with the Federal Maritime Commission, with two others indicating By Bill Mongelluzzo The world's largest online retailer also is taking steps to control deliveries in its home market.

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