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Ryder System Inc. is positioning itself to fill a major void left by Amazon.com Inc. after the online retail giant announced it will restrict warehouse space for third-party sellers.
Fulfillment by Amazon helps vendors store and ship products they also sell through the website. Amazon is restricting space based on inventory productivity for those third-party sellers using the fulfillment service.
“I think everyone was pretty shocked by the news,” Ryan Singerline, Ryder director of customer logistics, told Transport Topics. “I think it makes sense with the explosive growth we saw in the e-commerce space when COVID hit. They’re looking to gain capability in their network.”
Amazon on July 13 told its third-party sellers they would be limited to about three months worth of inventory space at its facilities. The company had never restricted quantities of products that sellers can store in its warehouses.
I think everyone was pretty shocked by the news.
Ryan Singerline, Ryder director of customer logistics, on Amazon restricting warehouse space available to third-party sellers
“For the most part, we’ve been focused on retailers and not really on people who are leveraging marketplaces,” Singerline said. “But with this news coming up, we thought we saw a good opportunity to start to pool in and focus on these marketplaces that have third-party sellers.”
Ryder already has been working to bolster its network over the past few years, including new fulfillment centers as the company wants to be close to the end consumer.
Amazon announcing the changes happened to be good timing for those plans.
“We’re really building this network because we understand there is opportunity here,” Singerline said. “I think it’s going to be long term. Amazon is investing in 30 new fulfillment centers, but I still believe, even with that information, that will help them meet capacity needs, not get to a place where they are pulling them back.”
Singerline noted that the company has a history of identifying opportunities and knowing when to step into new areas. Ryder has been talking with partners and trying to notify third-party sellers that it has the capacity to be an alternative.
“We’re integrated with the Amazon marketplace,” Singerline said. “We have these integrations set up. The core of our product is fulfillment. I think we’re now showing the market that we have the ability to fulfill for all these other retailers.”
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Ryder is promising these impacted sellers transparency and no penalties, startup costs or hidden fees. The company also is offering them a fulfillment-by-merchant option or a hybrid solution in which sellers can continue to leverage the Amazon platform for selling products.
“We are receiving requests daily since this news came about,” Singerline said. “We’re very excited about it. There is a tangible feel about the opportunity. It is there. There is a lot of interest, and we’re working with quite a few partners so they can continue to have their supply chain.”
Amazon was one of many companies within the supply chain that saw a surge of orders caused by the coronavirus pandemic. Its decision to restrict warehouse space is intended to ensure there is enough storage for holiday inventory later this year.
“The demand started when COVID hit, and there were products that were essential and nonessential,” Singerline said. “There was somewhat of a prioritization of fulfillment within the Amazon network.”
Singerline believes the online retailer is trying to warn third-party sellers of capability concerns now since changes happened so abruptly before with the coronavirus. That way, third-party sellers can source additional capacity elsewhere.
“We’re looking to provide support through that transition,” Singerline said. “We understand that expedience is important. We’re structured in a way we can be pretty agile and can get things set up pretty quickly for these third-party sellers.”
Ryder ranks No. 10 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 5 on the TT Top 50 list of the largest logistics companies.
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