The market to ship stuff (mostly) across the Pacific is a $350
billion business, but a low-margin one. Shippers charge $1,300 to ship
a forty-foot container holding up to 10,000 units of product (13 cents
per unit, or just under $10 to deliver a flatscreen TV). It’s a down-and-
dirty business, unless you’re Amazon. The biggest component of that
cost comes from labor: unloading and loading the ships and the
paperwork. Amazon can deploy hardware (robotics) and software to
reduce these costs. Combined with the company’s fledgling aircraft
fleet, this could prove another huge business for Amazon.^68
Between drones, 757/767s, tractor trailers, trans-Pacific shipping,
and retired military generals (no joke) who oversaw the world’s most
complex logistics operations (try supplying submarines and aircraft
carriers that don’t surface or dock more than once every six months),
Amazon is building the most robust logistics infrastructure in history.
If you’re like me, this can only leave you in awe: I can’t even make sure
I have Gatorade in the fridge when I need it.
Stores
The final brick in Amazon’s strategy for world domination is its use of
shitloads of assets piled up online to conquer the retail landscape
offline. That’s right—I mean stores, those things that were supposed to
perish thanks to e-commerce.
The truth is that the death of physical stores has been vastly
overstated. In fact, it’s not stores that are dying, but the middle class—
and, in turn, the businesses that serve that once-great cohort and its
neighborhoods. The largest mall owner in the United States is Simon
Property Group. Its shares have been hit hard in 2017 after hitting an
all-time high in 2016.^69 However, Simon will likely be fine, as it sold
properties in middle- and lower-income neighborhoods to focus on
wealthy neighborhoods. Forty-four percent of total U.S. mall value,
based on sales, size, and quality among other measures, now resides
with the top hundred properties, out of about a thousand malls.
Taubman Properties, another owner of high-end malls, reports tenants
averaged sales per square foot of $800 in 2015, up 57 percent since
- Compare that to CBL & Associates Properties Inc., which