Retail War: WalMart Threatens Truckers over Amazon

Perhaps it was inevitable, but Amazon and Walmart are increasingly competing in the same markets. Walmart seeks to expand its e-marketing share. Amazon has moved into the grocery business in an enormous way. The transportation companies and other businesses are caught in the middle of this struggle of retail giants. It’s going to be a fascinating battle to watch.

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.

What we’ve got here is a tug-of-war forcing the middlemen in all of this to make choices they’d rather not. And the results of all of this are not entirely predictable. The law of unintended consequences is still alive and well.

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.

Here’s where they are butting heads.

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.

And just to keep the whole battle even more interesting, President Trump decided to weigh in with a Tweet.

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!”

The retail market has long been incredibly dynamic with consumer preferences changing as fast as new products and services are developed. Some will be fantastically successful and others will be total flops.

Wonder who will finally come out on top in this battle, and what will be the deciding factors?

Source: ZeroHedge