Recently, we got a behind-the-scenes perspective from Hannah McClellan, Vice President of Amazon Freight, during a FreightWaves webinar co-hosted with MercuryGate. When asked, “What keeps your customers up at night?” here’s her response.
“In a word, I think it’s uncertainty.”
We’ve been through a lot. “COVID-19, supply chain disruptions, and global events have put us in uncharted territory these last few years,” says McClellan. “Freight has always had its share of volatility—that’s the nature of the game—but take everything served up alongside the pandemic and its ongoing, widespread repercussions, and you’ve got a uniquely powerful formula for losing sleep.”
McClellan, who has spent the last 12 years at Amazon, says that there is one thing that is clear for what lies ahead: Supply is outpacing demand again.
Another factor contributing to the industry’s volatility is rising costs. “Costs are a preexisting condition that’s now amplified by rising inflation. Logistics costs are rising, with fuel costs as just one variable,” says McClellan.
“On top of it, we’re all still coping with the unprecedented supply chain disruptions that are a direct result of COVID-19. The storm of 2020 and 2021 may be settling, but the impact on businesses and global markets really hasn’t, whether it’s supply change challenges or workforce constraints.”
So how do you still get some beauty sleep as a shipper? McClellan says to embrace the uncertainty and shares some ways that she and her team are doing so at Amazon Freight:
First, look to technology to increase efficiency. For us at Amazon, that means deploying technology to optimally plan supply within our network and reduce empty miles. We have algorithms in place that take fuel prices into account for spot and contract prices. Streamlining customer communication for speedier processing and issue resolution is also a priority, as is keeping a consistent pulse on shipper feedback.
Next, work backwards from the customer. For us, that means looking for ways to help reduce business costs for shippers. We offer flexibility in lead times and planning, so our customers can find more agility in pricing.
And that word, flexibility, brings us to the last one. Stay nimble. We own more than 46,000 trailers now but tap into third party capacity, giving us a fleet of over 50,000 trailers and carriers in our network. We grow our carrier base constantly, including with the Amazon Freight Partner program, which enables entrepreneurs to start and grow their trucking businesses.
Ultimately, McClellan’s guidance for shippers is to “stay flexible in the face of uncertainty, stay innovative and agile, and you’ll weather any storm.”
The pre-pandemic world was much more predictable than today, which makes it even important for shippers to have access to Amazon’s reliable capacity on demand through real-time technology. That’s why MercuryGate and Amazon have collaborated so that MercuryGate’s customers can access and leverage Amazon’s existing trailer fleet. This means, since May 2022, shippers on the MercuryGate transportation management system (TMS) can book their loads with Amazon Freight’s network, which is part of the same network that Amazon uses to keep its own loads moving.
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