Amazon’s business in the U.K. might hit a snag after City Link — its Prime and next-day delivery company — filed bankruptcy, Seeking Alpha reported.
“The impact to Amazon.com will come in two ways: First, it will require a new shipping partner for part of its shipping in the U.K. This new shipping partner is likely to be more expensive than City Link, both for it to be viable and because Amazon.com is likely to have chosen one of the cheapest, if not the cheapest method for these deliveries – given how critical shipping costs are for Amazon.com,” Seeking Alpha wrote.
As for the logistics moving forward, Amazon must deal with its undelivered packages. Seeking Alpha reported that City Link was said to be holding 1 million parcels, though not all necessarily from Amazon.
A recent update on the developing issue reported that: “City Link is staying open for enough time to try and deliver packages to customers and intended recipients. This development minimizes the possible losses to Amazon.com and the customer dissatisfaction which could come from it.”
Still, logistical operations could still cost Amazon.
“This will breed an administrative mess for Amazon.com – higher costs to resolve the issue and unsatisfied customers due to delays and worries,” the initial report said.
Because the U.K. makes up 12 percent of Amazon’s sales, according to the report, this could impact a significant customer base for the e-commerce giant that’s currently trying to expand its global presence.