It Begins: WalMart Warns Truckers It Will No Longer Work With Them If They Move Goods For Amazon

Tyler Durden's picture

The cold war between America's two largest retailers just turned hot.

In a note this morning from Deutsche Bank's freight and logistics analyst Amit Mehrotra, he notes that  the "WMT vs. AMZN battle is heating up" and points to a report by DV Velocity, according to which a well respected transportation industry consultant told attendees of a logistics conference that Walmart (WMT) is telling trucking companies that it will no longer do business with them if they continue moving goods for Amazon (AMZN).

This follows similar reports citing WMT’s “request” for its tech partners to stop using Amazon Web Services.

The news, while suggestive perhaps of Walmart's growing desperation in its war with the retail juggernaut that is Amazon, has dramatic implications not only for the future of retail (and associated prices) but for one of the most important US industries: trucking, and the number of people it employes.

According to Deutsche, these developments, "are likely to have significant implications for U.S. transportation companies, in our view, as Amazon and Walmart remain two of the largest users of truckload capacity. For reference Walmart represents about 14% of SWFT’s operating revenues and traditional retail accounts for about half of WERN's total sales (WMT around 4%)."

A map of Amazon's multiplying fulfuillment centers is shown below.

And, as CNBC reported last week, WalMart warned some tech companies that if they want Wal-Mart's business, they can't run applications on Amazon's cloud platform, Amazon Web Services, some tech companies told The Wall Street Journal. Wal-Mart uses some tech vendors' cloud apps that run on AWS, Wal-Mart spokesman Dan Toporek told the Journal, though he declined to say which apps or how many. But Toporek did acknowledge instances where Wal-Mart is pushing for AWS alternatives, the Journal reported Wednesday. 

Wal-Mart spokesman Toporek told CNBC in an email: "Our vendors have the choice of using any cloud provider that meets their needs and their customers' needs. It shouldn't be a big surprise that there are cases in which we'd prefer our most sensitive data isn't sitting on a competitor's platform." Wal-Mart doesn't appear to be alone in this push to leave AWS, either.

Other large retailers are reportedly requesting that service providers move away from AWS, the Journal said, citing technology vendors that work with retailers. Adding to the many growing conflicts of interest, Amazon has confirmed a number of retailers it competes with use AWS, for example GameStop.

 

The battle between Wal-Mart and Amazon is only heating up, after Amazon announced plans last week to acquire brick-and-mortar grocery retailer Whole Foods. With Amazon stepping into Wal-Mart's turf in grocery, Wal-Mart has been trying to beef up its e-commerce presence.

In light of AMZN's recent expansion with the purchase of WFM, one can see why WMT is starting to take it much more seriously. Perhaps Amazon's latest push (and WMT's lobbying effort) may explain why Trump decided to finally reignite his long-simmering war with AMZN CEO Jeff Bezos, when this morning he tweeted “The #AmazonWashingtonPost, sometimes referred to as the guardian of Amazon not paying internet taxes (which they should) is FAKE NEWS!”

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TalkToLind's picture

All your trucks are belong to us!

NoDecaf's picture

when this turns to actual street brawls, where will they get their gear from AMZN or WMT?

 

that is the question.

So Close's picture

Amazon to Walmart - "How do you like our self-driving Tesla semis?"

Musk -  (Insert Evil laugh.)

Bezos raises glass to Musk - "Cheers buddy."

MagicHandPuppet's picture

These might be fighting words... might also be foreplay.

tmosley's picture

Looks to me like Walmart just jumped the shark with this one.

Shipping companies will likely either tell them to pound sand, and suddenly Walmart won't be getting supplied, or they will just split off a portion of their company to ship just for Walmart, freely moving trucks between the fleets as needed.

Sounds like something some idiot grandson of Sam Walton would pull.

Jim Sampson's picture

It is nice to have a warehouse in Vegas because I get some things same day but the Warehouse staff in N Las Vegas sucks!  Most don't attempt to ring your door bell, they just throw them over the fence or leave them on the street.  Plus, they are using their own cars.  How did they get people to do this shit?

SafelyGraze's picture

you're either *for* us, or your *against* us

hugs,
dualism

wait! that's not true!!

hugs,
monism 

mtl4's picture

Wouldn't be the least bit surprised if Walmart was lobbying to have online goods taxed on delivery (not just warehouse states) like other countries.........that would certainly be taking a giant leak in AMZN's cornflakes.

PrayingMantis's picture

... let them duke it out ... it's survival of the fittest Chinese manufacturers' retail outlet ...

... and btw, at least in Cabo San Lucas, cooler heads prevail ... Mexican-style ...

>>> http://www.chron.com/news/local/article/Killings-continue-in-Mexico-s-Ba... ...

;)

jeff montanye's picture

the only thing that will dent the linked activity is legalization, regulation and taxation.  not often is that a relatively benign force but in this case it is.

as for wmt and amzn, wmt may need to go closer to head to head with the one breasted warrior woman.  

BigJim's picture

Thanks, Tyler, I've been really, REALLY missing these melodramatic "and so it begins" headlines.

Ricky Lahey's picture

Survival of the fitness, boys.

froze25's picture

Companies do this all the time, create a second company to serve a competitor. Similar to Banks financing both sides of all wars since the days of Napoleon.

El Oregonian's picture

When you suit up and jump in the deep end, you're liable to be gobbled up by one of the big sharks looking for a quick meal. You've got to be quick and nimble... "If you move too late; you'll be just someone else's bait"

Pickleton's picture

Starting to lookke that TV show The Expanse.

 

Huge interstellar corporations run everything and they war against and sabotage each other.

 

 

johngaltfla's picture

If you're a trucking company, being kicked out of the WalMart whorehouse isn't a terrible thing.

They abuse the transportation companies and absolutely destroy the margins usually leaving them with less than a 2% margin on every move for the Arkansas pimps.

Koba the Dread's picture

And Amazon uses the US Mails (whatever that's called these days) and you pay for most of Amazon's freight charges in your income tax.

deimos178's picture

No tax money goes to support the post office. They operate solely on revenue generated by the cost of mailing.

sessinpo's picture

deimos178   No tax money goes to support the post office. They operate solely on revenue generated by the cost of mailing.

Sorry missed the sarc tag cuz that was funny as shit. The USPS has had some terrible years regarding profit. It has had some profitable times. In 2012, the USPS lost over $15 Billion. Subsidies and legal monopolies that the USPS enjoys yearly are worth billions. What subsidy or monopoly? Did you know there is a law that forbids other shipping companies to deliver items to your mailbox? Yup, but its okay for because UPS, FedEx and others deliver to your door or porch or whatever, just not your mailbox. USPS is exempt for state and local property and real estate taxes as well as parking tickets and other DMV charges. Oh I could go on but I know you were being sarcastic.

 

BigJim's picture

... and guess who will be picking up their (unfunded) pension liabilities?

PTR's picture

Heh.  You said "post office" and "revenue" together.

Lucretius's picture

Absolutely correct! MallWart is the worst to deliver to, treat drivers like the enemy!  Trucks have become mobile warehouses. Do NOT show up more than one hour early, do NOT think of parking anywhere near our facility, and if you are more than 1 hour past your scheduled "appointment", come back tomorrow (even though they can take 8 hours to remove! ! pallet!), we'll try and squeeze you in!

 I'm just another poor slob, but I vote with every $ I spend, and I will not spend ANY at MallWart' and same for Scamazon   .

greenskeeper carl's picture

Ha, I just finished the first season of that on, drumroll, amazon prime TV. It is a good analogy. Like the TV show, there is no 'good guy' here, just two self interested parties headed by people who want more money and power over their plebs and be king dingdong of the world.

 

Wish there was a way for them to both lose.

dumluk's picture

Geez, could be analagous to the existing geo political situation.....No good guys....

Tall Tom's picture

 

 

There is a way for both of them to lose.

 

Do not use them and they lose.

 

As profit margins are down to 5% in the cutthroat world of Retail only 5% of Americans boycotting both companies will make their Bottom Lines bleed Red Ink.

 

People will sell their stocks in droves as their Dividends plunge because people seek yield on their investment Capital.

 

And it all begins with you...

 

You have the power of YOUR WALLET and your cash is the ammunition.  Refuse to financially support what you claim not to support as Financial Support IS SUPPORT.

 

Damn. How many times must I repeat that basic Axiom?

 

Or you can await the Economic Collapse and react to that instead of becoming an ACTIVIST and being proactive.

 

They will both lose in the long term in the coming Greater Depression as sales precipitiously decline and you can count on that if you choose.

 

In either way...Your wish has been granted but...be careful what you wish for as you may actually receive it.

nufio's picture

just because they ahve 5 % margin doesnt mean a 5% drop in revenue will drop their margins to zero. wtf?

Kayman's picture

I gots me an E in maff.  E is for Excellent, right?  Right?

Giant Meteor's picture

“There's an old saying in Tennessee — I know it's in Texas, probably in Tennessee — that says, fool me once, shame on — shame on you. Fool me — you can't get fooled again.”

God Bless his heart ..

Bushism's were fun !

Son of Loki's picture
Woman found dead in Oklahoma Walmart bathroom three days after entering store

 

http://www.chron.com/national/article/Women-found-dead-in-Oklahoma-Walma...

Kayman's picture

"Bushism's were fun !"

Unless you were an Iraqi getting a large dose of "freedom". Some joke that was.

Giant Meteor's picture

No disagreement on that salient point ..

kolanu's picture

I heard the same thing happened in Fort Mac when the tar sands were booming and everybody in town was making megabucks. Canada Post couldn't get anyone to work for their what would be fairly decent wages anywhere else, so they resorted to contracting out to some old hippy dude in a rickety panel truck who drove around tossing the packages into the snowbanks in front of houses.

Amazon has a culture of abusing their underpaid warehouse staff. My guess is the warehouse delivery people don't give a damn about what happens to your packages  after it leaves their delapidated car when they have to make their quota of deliveries or they will get their already low pay docked. 

Killer the Buzzard's picture

If I were a trucker I'd just incorporate a seperate company and use it to move goods for Amazon.

Muddy1's picture

For years small business and mom and pop stores complained WM was destroying them, and they got support from many people.  But those peope are strangely quiet about the growth of Amazon.

checkessential's picture

I bet half of those people adapted by establishing online stores through Amazon.  No more bricks and mortar for them either. 

Amazon provided a means to partner with them and sell on their platform.  Walmart just put them out of business in their home towns.  Karma's a bitch.   

Giant Meteor's picture

They've been assimilated. Resistance has been futile ..

selling_air's picture

Desperation. 

... to answer your question.

JackT's picture

How does Amazon get to use USPS delivery vehicles for their Sunday deliveries?

spastic_colon's picture

amazon is now nothing but a giant 7-11.....now that they charge tax in a lot of states (because they have a warehouse "store" there) and soon to be all of them they won't matter.....who cares about their movies, music, etc they all suck........you're paying a membership fee to buy chinese crap....at least wal-mart sells their chinese crap without the fee.

takeaction's picture

Hmmm... I read your comment...and you are definately not in the "Norm".....that is why Amazon is DOMINATING the markets.  Chinese Crap?  So you say that you ONLY buy American...interesting.  That's impossible.  You hate low prices......No you don't...no You love cheap stuff too.  Americans always want a deal.  Also...on Amazon I don't see Beer and Cigerettes....which is the profit center for 7-11.  I am not defending Amazon...just telling you that your comment holds NO WATER...and is based on jibberish and emotion.

spastic_colon's picture

nice try but well off the mark; you know nothing about me or my habits; i perform research and analysis on every single purchase i make; quality matters; utility matters; necessity matters; if i dont need it i dont buy it; i replace parts myself; i fix my own cars (which are all 10+ years old); i can easily afford repair scams but choose not to use them; i know the value of time, money, quality, and businesses relationships; i also know i can find every single item on amazon more economically elsewhere; i dont love "cheap" anything but i do love inexpensive quality; buying my straw hats in the fall is a hobby; but keep trying you should be out of debt by the time your grandchildren pass.

ThuleNord's picture

" i perform research and analysis on every single purchase i make"

Gibber gibber gibber. What a load of hot air.

greenskeeper carl's picture

Haha i laughed at that too. Does he have spreadsheets or what? Must be a slow shopper. Like the proverbail old lady that has to pick up every melon and knock on it, except with 'every single purchase' he makes. Must have a lot of spare time.

 

 

Will To Live's picture

Spare time = Government worker = Parasite on Humanity. 

Tall Tom's picture

 

 

 

 

Or very frugal and very wealthy.

 

My landlord, before he passed on, behaved much in the same way.

 

A penny saved is a Penny earned. somevody wise and famous spoke those words about 250 years ago. You might find his gace on a C-Note...if you happen to have one of those in yer wallet...

 

...which seems somewhat doubtful as you are promoting wreckless consumerism.

 

If you earn a Million a year and your expenses are a Million and a dollar then you are losing capital.

 

it is not how much you make but more like how much you can keep to invest that will garner you legacy wealth and a healthy retirement..

 

And instead of you laboring, and frittering your hours away, then your capital can be working for you...as my landlord's wealth was...before his departure from planet Earth.

 

But he enjoyed his One Half Year tours (multiple tours that is) of the Nation before he died.

 

He was not a Government Employee but ran his own TeeVee Repair Shop right in the same building where I live...

Tall Tom's picture

 

 

I'd pay attention to his comments.

 

Read my response to The Will to Live above.

Giant Meteor's picture

Good to hear from you Tom.

Practical advise, good for anyone ..

Of course living in the, fast this, fast that, just in the nick of time, disposable society ... has watered down generations of folks who do not see the value in, well, the value  of long term strategic planning .. in example, owning vehicles outright, that one can still service themselves ....

Lucretius's picture

"i do love inexpensive quality; buying my straw hats in the fall is a hobby"

with a hobby like that, it must leave a lot of time for other things... just saying.

;-D)

Giant Meteor's picture

Harbor freight sucks, but sometimes a Meteor has to do what a Meteor has to do ..

Btw way, I applaud your post for it's fine example in utilitarian practicality .. Also, curb shopping is good and scrapping ain't as lucrative as it used to be a few years back, but still worth the effort if you have a fair amount of it  .. the precious etc. Looks like roughly half are either calling bullshit or simply hate straw hats ;)