By JOC Staff Sep 26 2019 / JOC
Amazon is continuing to expand and enhance its suite of supply chain services with the purchase of digital US customs broker and trade compliance software provider INLT.
Terms of the deal were not disclosed, but the e-commerce behemoth confirmed the acquisition to Reuters on Tuesday following an announcement on Los Angeles-based INLT’s website. “INLT is a smart, nimble team that is helping companies simplify and lower the cost of importing goods into the United States,” an Amazon spokesperson told Reuters.
Founded in 2017, INLT is a cloud-based software-as-a-service (SaaS) global trade management (GTM) provider for United States importers. The company offers digital tools and services aimed at increasing compliance with US Customs and Border Protection rules and shipper visibility, thereby saving time and money.
Compared with incumbent GTM platform providers such as Amber Road and Descartes Systems, INLT was a relatively small company. According to an April 2018 article in LA TechWatch, the company raised $1 million in its seed funding round and had planned for another round of funding sometime in early 2019.
Co-founder Caro Krissman told LA TechWatch at the time the idea for INLT came from his experiences running a sourcing firm and a consumer packaged goods company. “A great deal of time and energy was spent managing and optimizing [customs compliance] process, as well as money customizing ERP [enterprise resource planning] solutions. We did the work and handed it over on a silver platter to the customs broker, then got no value or visibility from there,” he said.
In making the purchase, Amazon is bolting on additional logistics management software to a growing suite of products it offers to its online sellers. Amazon has been not-so-quietly building its supply chain capabilities over the past several years but has consistently said publicly it does not intend to displace existing transportation providers, many of which the company still relies on to move goods on behalf of its merchants.
Gaining non-vessel-operating common carrier (NVO) status in 2016 gave the company greater control over its internal supply chain, but it also presented a potential opportunity for Amazon to build a supply chain platform it could market as a distinct service, even selling to shippers outside of its marketplace network. Amazon took the next step toward becoming a full-fledged third-party logistics provider in April with the launch of its US truck brokerage business. Questions remain, however, as to whether beneficial cargo owners (BCOs) and domestic shippers will want to work with Amazon as a forwarder or freight broker, given that the company could be seen as a direct competitor in its capacity as a shipper.
Several GTM providers have merged or been acquired over the past year — E2open bought Amber Road for $425 million in May, Thomson Reuters acquired Integration Point for an undisclosed sum in October 2018, Descartes bought Visual Compliance for $248 million in February, and customs broker Livingston International (which also offers GTM software) was sold to a private equity fund, also in February — but Amazon’s purchase of INLT may represent a shift in strategy. Rather than build these capabilities in-house or purchase a do-it-all GTM platform, Amazon appears to be assembling one from individual pieces, with INLT serving as the customs brokerage segment.
Maersk Line, which is looking to evolve from the world’s largest container carrier to a provider of end-to-end integrated logistics services, made a similar move in February with the purchase of New Jersey-based customs broker Vandegrift, a deal that tripled the company’s customs brokerage footprint in the US and Canada.