Amazon is planning to take control of the final element of the online shopping experience by delivering its packages itself.
While recent reports have highlighted the company’s fanciful experimentation with drone delivery systems, another altogether more grounded experiment is going on in various parts of the US.
As highlighted by a recent Wall Street Journal report, the online giant has set up small delivery networks in San Francisco, Los Angeles, and New York. These networks, which Amazon is calling Last Mile, feature Amazon-emblazoned trucks driven by Amazon-supervised contractors, and each exclusively carrying Amazon orders to their nearby final destinations.
The benefits to Amazon and its customers will be many. The online shopping giant will have almost complete end-to-end control over its products from the time they are ordered to the time they arrive at a customer’s house. It should also help the company to circumvent the delays that blight it over the Christmas period.
Owning the delivery process will also cut shipping costs for the company, which have apparently grown as a percentage of sales since 2009.
The latter problem was all too evident with the company’s recent quarterly earnings call. This revealed that shipping costs had risen 31 percent, and that profits were a relatively slender $108 million (with sales of $19.74 billion, that’s not as great as it sounds).
As the report points out, this self-delivery initiative could also point the way forward to a time when same day deliveries can be specified on your Amazon order. On a more basic level, Amazon could deliver at more specific times to suit its customers – even at night, so you wouldn’t have to wait in for your package.
“Amazon is growing at a faster speed than UPS and FedEx, who are responsible for shipping the majority of our packages,” read a recent job posting on the Amazon website. “At this rate Amazon cannot continue to rely solely on the solutions provided through traditional logistics providers. To do so will limit our growth, increase costs and impede innovation in delivery capabilities.”
Amazon has already created similar small-scale networks in certain parts of the UK where commercial carriers have been unable to cope with the sheer volume of orders.
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