Amazon Inc plans to broaden its logistics operation in the mainland, as part of its efforts to contain the increasing cost of shipping billions of packages.

The company's plans in China include cargo and customs handling for goods to be delivered in the ports of Japan, Europe and the United States. Experts say the move could enable Amazon offer shipping services to other companies and it will consequently rival with giant companies such as the United Parcel Service Inc and DHL Worldwide Express.

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The move also reflects Amazon's strategy to integrate its cloud computer platform Amazon Web Services, which is the fastest emerging unit of the company. The platform was initially introduced to cater to the retail operations of the company, but now, it is hosting data for other establishments

American e-commerce company is being put under pressure by Wall Street to bring down its shipping costs, which has skyrocketed by 37 percent in the latest quarter compared with the same period in 2014. Amazon has refused to comment on the issue.

Beijing Century Joyo Courier Service, Amazon's Chinese subsidiary, is registered as a freight forwarder, which will handle the legal processes (customs and documentations) involved in transporting cargo out of the country. 

The subsidiary also applied for a similar specification in November with the Federal Maritime Commission in the USA. Amazon also applied to the Shanghai Shipping Exchange to give its company permit as a shipping broker for 12 routes, such as Shanghai to Hamburg, Germany, and Shanghai to Los Angeles.

According to John Manners-Bell, the CEO of logistics anlysis firm Transport Intelligence, Amazon is targeting major gateways and appears to be creating the foundation for a much bigger forwarding operation. 

As stipulated in the documents that Beijing Century Joyo submitted to the exchange, transporting a 40-foot dry van container from Shanghai to Hamburg will cost clients around $520 to $2,530. The range is relatively the same with rival forwarders, and price is flexible based on volume.

Experts are anticipating that Amazon will utilize its new freight forwarder license to offer convenience to Chinese businessmen by transporting their goods to huge hubs where Amazon has storehouses that ships goods to clients. Amazon will deal with all the paper works including selecting of shipping lines and ensuring that cargo trucks are there to pick up the products on the other side. In short, businessmen will only deal with Amazon instead of negotiating with various companies for trucking, storing and shipping. 

TagsAmazon, DHL, Amazon Web Services, shipping cost, Beijing Century Joyo Courier Service