For the first time, Amazon is calling itself a "transportation service provider," as seen in its annual 10-K filing.
The company makes the classification in the "cost of sales" portion of the report (emphasis added):
Cost of sales primarily consists of the purchase price of consumer products, digital media content costs where we record revenue gross, including Prime Video and Prime Music, packaging supplies, sortation and delivery centers and related equipment costs, and inbound and outbound shipping costs, including where we are the transportation service provider.
In last year's report, the company simply said "inbound and outbound shipping costs, including sortation and delivery centers, and related equipment costs."
This change is significant following months of reports about Amazon taking steps to build its own delivery and logistics business to take full control of its fulfillment process.
In this week's earnings call, CFO Brian Olsavsky tried to assuage the fears of partners like UPS and FedEx by saying that even though it is building its own logistics business, it's not trying to replace anyone — just supplement them.
Despite that assurance, Baird Equity Capital sees this new turn of phrase as an indication that Amazon could be after its next $400 billion opportunity after all.
Analyst Colin Sebastian writes that the "tidbit" adds "further credibility to our view that Amazon will be creating a logistics service that ultimately competes with existing providers."
Although he doesn't expect Amazon to launch a full-fledged logistics business now, he thinks it's moving in that direction:
We continue to expect Amazon to add logistics primarily to meet its own growth, but over time, and in incremental fashion, we believe it is likely that Amazon will offer this expertise to third parties to help subsidize those costs.
