A 49-year old trucking company is suing Amazon in the latest spar between the logistics industry and the upstart giant
- Missouri-based Prime Inc., the 14th-largest trucking company in the US, is suing Amazon in a federal court for copyright infringement.
- The Seattle-based retailer's fleet of Prime-branded trucks is "confusingly similar" to 49-year-old Prime Inc.'s trucks, the company claimed in its suit.
- It's the latest spar Amazon has had with logistics incumbents as it expands its in-house delivery might.
For decades, a Springfield, Missouri-based trucking company was the only company with trucks emblazoned with "Prime." Internationally and throughout the US, 49-year-old Prime Inc. has 12,000 trailers and is looking to add up to 3,000 in the coming years.
But Prime Inc. says Amazon is marring the company's branding and reputation, so it is suing the retail giant claiming copyright infringement in a case filed in the federal court in the Western District of Missouri.
Several years ago, Amazon started to in-house its delivery services from FedEx, UPS, and other providers. Now, Amazon has a fleet of 10,000 trailers emblazoned with the Prime logo and some 20,000 Prime-branded sprinter vans to do last mile package deliveries, along with dozens of Prime-branded cargo planes.
Prime Inc. wrote in the July 2 court case that Amazon's trailers are "confusingly similar" to that of Prime Inc. - and it's costing the Missouri trucker. Prime Inc. is the 14th-largest trucking company in the US, according to the Commercial Carrier Journal.
"As a result of Amazon's unlawful acts, Prime Inc. has suffered, is suffering, and, unless these unlawful acts are preliminarily and permanently enjoined by the Court, will continue to suffer immediate and irreparable injury to its business, reputation, and goodwill for which there is no adequate remedy at law," the case stated.
Prime Inc. added in a statement sent to Business Insider that Amazon's usage of the word "Prime" on the trucks, without being accompanied by "Amazon," is causing "confusion in the market."
"Amazon's usage, for example, makes it difficult to ascertain the true owner of tens of thousands of trailers, when necessary," the statement said. "While Prime Inc. never enters into litigation lightly, it is committed to protecting its valuable name and the unique reputation it has worked so hard to earn."
Amazon did not respond to Business Insider's request for comment.
Amazon is not playing well with others in the logistics field
The mega-retailer has been knocking heads with other long-time logistics companies as it expands into moving its own packages by air, truck, train, and ocean.
The in-housing moves have been particularly taxing to companies who provide Amazon with their delivery services. This is because the companies Amazon uses for logistics often depend on the retail giant for a large part of their revenue, so when Amazon curtails its business, its partners are often forced to readjust their yearly outlooks.
In Feb., Amazon's transition to move its own packages slashed $600 million in expected revenues at XPO Logistics - the top logistics company by revenue in 2017. XPO's leading business with Amazon was taking packages from the company and delivering them via the US Postal Service, otherwise called "postal injection," Seaport Global analyst Kevin Sterling previously told Business Insider.
A $402 million trucking company went under in Feb., a bankruptcy that analysts said was partially because of Amazon's in-housing moves.
Other companies have found that Amazon is a big customer, but not one that drives excellent profits. In May, FedEx unexpectedly announced that it would no longer fly Amazon packages.
A Business Insider report showed that that may have been motivated by the low margins Amazon packages carry. While FedEx's air networks had been carrying a lot of parcels, the company's financial statements indicated that those huge amounts of packages weren't generating a lot of profit per piece.
Wall Street is pressuring UPS, which derives 3-5% of its revenue from Amazon, on the same problem of low margins, Business Insider reported on July 10.
"Amazon packages are very small, and they don't take up a whole lot of space, but at the same time there's not a whole lot of money to be made by moving them," Cathy Roberson, an analyst with Logistics Trends & Insights LLC, previously told Business Insider.