Amazon’s Shipping Empire Is Challenging UPS and FedEx
wsj.com
wsj.com
USPS consistently rings my doorbell and makes sure packages are handed to me rather than left outside.
Amazon delivered packages have been: thrown from the street; arrive crushed, punctured, or otherwise damaged; left in the driveway; left in the neighbors yard; never ring the doorbell, unless it's after dark, and then they ring and run.
Amazon's last mile service is a complete shit show, impressively worse than the random cut rate last mile delivery services they used when they were trying to force UPS and FedEx to lower prices.
Do yours not take photos?
And ideally simply depositing a package on the porch for every random asshole to grab shouldn't be a thing either, it thankfully is not in Germany.
Doesn’t bother me, I always select the longest wait anyway.
Here's a (somewhat sensationalized, it's Buzzfeed News) article about some of the negatives that have shown up. It references that all of the delivery network is decentralized: https://www.buzzfeednews.com/article/carolineodonovan/amazon...
i watched a USPS driver do that. i'm amazed he could heft the package that far.
> USPS consistently rings my doorbell
i don't know that they've ever rung my doorbell.
> Amazon's last mile service is a complete shit show
they all vary in quality by location. fedex was nearly unusable at my last residence, but is great where i'm at now. anecdotes simply aren't valuable here.
disc: I'm Amazon employee, not in Retail (anymore)
One sentence in that article that I like was mentioning Amazon purchasing of dead malls. I had to thump myself in the head..'of course'. I've always wondered what would happen to those facilities and mini storage and fulfillment centers are good ideas.
Maybe we could ship Amazon direct to mini storage and cut out the middle man. Making 'too much stuff' more efficient seems like a genuine plan.
1. Getting traffic to online store.
2. Converting it to sales.
3. Able to deliver it to customers in time.
4. Service the complaints or product in time.
Out of this website traffic is directly linked to assortment and sales is directly linked to price (value for money vis a vis quality) and delivery besides traffic. Logistics i.e. storing, sorting and last mile delivery is one of the toughest challenges to solve in this business. Amazon used UPS, FedEx and USPS in the beginning to help them understand how its done, acquire expertise. They took that knowledge and than applied technology to solve some of the challenges and reduce costs.
It was just a matter of time they become full logistics company, because in reality every retailer and distributor is primarily a logistics company with stores, warehouses and distribution center.
So it's hardly surprising they are competing with them. But I feel UPS, FedEx still do many other B2B supply chain work like delivering components to manufacturing site, vendor managed inventory, defence supplies, government supply chain, Olympics, major events and sports supply chain etc. so there will still be room for them to grow.
https://www.buzzfeednews.com/article/carolineodonovan/amazon...
For example, it's reported that FedEx drivers were involved in 41 deaths in 24 months:
> In the 24-month period prior to December 3, 2017, FedEx Express drivers were reported to have been involved in 1762 crashes, 575 involving injuries, including 41 deaths.
https://www.frg-law.com/carriers/fedex/
The big question is just how much Amazon is applying pressure and causing those sorts of issues, and are they outside of the normal expected incidents for logistics companies? WRT the Amazon delivery network, is this a matter of a few bad apple operators trying to squeeze every cent of profit by overworking drivers and not deploying more vans? Or is it a case of systemic unattainable expectations from Amazon that force every delivery partner to cut corners so they can maintain a livable profit margin?
Difficult to say from this article...but in spite of the sensationalism, the examples it recounts certainly aren't good.
Now I see their trucks nearly as often as Fed Ex and UPS.
https://www.buzzfeednews.com/article/carolineodonovan/amazon...
Your trusted Amazon delivery guy could fill your fridge while you supervise him through Amazon branded devices.
The program you're thinking of is likely "Amazon Flex" which is just part of their last-mile delivery system and uses independent contractors.
That said that they are /still/ smaller than Wallmart yet have scale sufficient to be competitive to mass shippers is amazing even considering the internet related physical letter shrinkage.
The issues that Amazon has seen, particularly during holiday peaks is that shippers do not always want to continue to lower their rates and that shippers do not always scale up their operations to meet Amazon's needs during the holidays. For example: https://www.latimes.com/business/la-fi-christmas-shipping-de... and https://www.washingtonpost.com/business/economy/amazon-ups-o...
In response to shippers not doing what they want and to provide leverage, Amazon started to do their own shipping. This originally started as same-day delivery experiments in large cities as part of Amazon Fresh (grocery delivery service). It grew into non-grocery deliveries as a competitive advantage for Prime same-day deliveries and expanded from there.
I expect that "Transportation By Amazon" (TBA) where Amazon does package delivery as a competitor to UPS and FedEx will probably start in the next year or two, barring any anti-trust or legal problems.
Via their multi-channel fulfillment offerings, you can already use Amazon's logistics network to ship your products sold on or off of Amazon. This would just be supporting more type of shipments than just fulfillment.
On the other hand, Fedex, DHL, UPS etc have built a big part of their strengths of shipping worldwide overnight. That's very different than what Amazon does, where they try to warehouse products close to customers to minimize shipping distance and time. Great when you want to buy an iPhone, but not suitable for shipping a document from New York City to Tokyo.
There is a reason most grocery stores are shifting, or have already shifted to, Google or Microsoft for their cloud infrastructure.
it's a good point, yet many still use Amazon/AWS regardless. Netflix, for instance (AWS). Then, on the micro-scale: FBA[0] sellers (Amazon Marketplace).
I assume it has to do with the ultra low barrier to entry which Amazon/AWS provides. The convenience factor is off the charts. Nevertheless, I assume Netflix has ideations of following in Dropbox's footsteps.[1]
[0] "Fulfilled by Amazon"
[1] abandoning AWS for self-owned dedicated infrastructure
Actually that’s a myth (https://www.networkworld.com/article/2891297/the-myth-about-... ). Oddly, unlike most corporate founding myths (e.g. eBay and Pez) it wasn’t invented by company marketing.
Since most of Amazon's negiotated rates with carriers are lower than what carriers offer to consumers directly, customers get lower prices and would benefit from Amazon's scale and customer service.
Now with Amazon's own transportation network finally taking off, Transportation By Amazon has gone from a concept that would have relied exclusively on third-party carriers (e.g. UPS, FedEx, USPS, etc.) to a likely reality with primary reliance on Amazon's infrastructure and supported by third-party carriers where Amazon does not have a robust prescence.
The notifications will send you a text message to your mobile phone or a push notification to the Amazon app on your smartphone as soon as your shipment gets delivered.
If your package is damaged, I would recommend contacting Amazon customer service and let them know. Based on the way they do scans and metrics, they know who the delivery driver was and it will reflect in the delivery driver's customer satisfaction score.
If there are enough compliants against a given delivery driver, they will probably not remain a delivery driver for long. Amazon wants to keep customers happy at all costs and will quickly sack employees and contractors who fail to meet their standards.
Turns out you can also contract with those shops as a private citizen to just ship random heavy stuff anywhere for super cheap. Because Amazon gives them enough volume, it's become cheaper for individuals to make their own shipping purchases too. Strange side effect.
I don't work for Amazon or anything, but my dad has used one of their DSP to ship some truly heavy stuff (250kg+).
Is all that in the "other"? Or did it get lumped in with Amazon's chunk? I want to know but the article doesn't help.
reminds me of McDonald's single-handedly bringing down the price of beef
Just so I don't misunderstand, does that stand for Delivery Service Provider?
It's certainly not good for the environment at least.
For consumers the more suppliers the better.
Not only is the human/societal cost high, consumers directly suffer as well as untrained contractors working irregular routes rush to meet unrealistic deadlines. Every day a different person in a rented van pulls up to throw armloads of packages at my building, may or may not be the right entrance, they don't know the place and have no time to check, before racing off to the next location.
Competition forces suppliers whose service is deemed inadequate by the market to change or disappear.
Clearly the market wants packages delivered fast and cheap.
I’m not sure how consumers suffer - if trained or untrained contractors fail at their jobs, consumers take their business elsewhere.
It sounds like you’re against Amazons delivery practices. Fine. But the more competition there is, the better. UPS or Fedex absolutely shouldn’t own the private delivery market.
Waterfall would also be 'more efficient' if we knew the right product to make and way to make it. If agile has taught us anything it's that we don't know and we can't know. We learn through trial and error and continually innovate. If there is only one company there is no incentive to innovate and discover better efficiencies.
So while the 'logic' is right, the supposition[0] is incorrect.
This is why 'the market' is the best way in practice. We observe an ebb and flow of centralization (Amazon is a good example) and decentralization in various industries. This is caused by innovation and disruption. When one company innovates/disrupts so well and continues to execute it can become a de facto "monopoly," gaining near 100% market share.
When the industry and market are allowed to continue unabated[1] this 'monopoly' can eventually be broken if the company fails to innovate and leaves the industry vulnerable to upstart disruptors. The very possibility means even with 100% market share the company is not a true monopoly, and in practice the consumer benefits from the company's 'existential fear' which motivates it to continue to serve its customers in better and better ways.
[0] knowing the best way [1] assuming the major player(s) doesn't lobby/enact regulations to protect its market/industry position
edited footnote formatting
I suppose this isn’t much different than a development team trying to work in both Postgres and MySQL. Sure, maybe you hedged your bets and your team uses both to experiment which is better, but at some point, it likely is better to develop expertise and experience in one of them especially if it’s a small team.
Ask any Brit how privatized rail's working out for them.
A forced bidding system seems to give gameability and artifical barriers to entry for little gain. To give an anchhacic example of the sort of problems it would be akin to requiring a business that can serve all of New York City competively before bidding. Having a mail room in the lobby of a large apartment would violate that due to serving only residents.
If there was just a single company responsible for some "last mile" area, smaller vehicles like this electric model [1] would suffice. They would distribute parcels from a depot that is filled by larger long distance trucks that do not need to belong to the same company.
The last point is important: If DHL, FedEx, UPS etc. each have their own final storage buildings and delivery fleet, those depots could not all be situated close enough to the target addresses.
fedex ground originated as a totally separate company that they acquired and re-branded.
https://about.van.fedex.com/our-story/history-timeline/histo...
Both JD & Taobao/Tmall have their own large shipping empires in China. I suspect that was part of the reason they pulled out. They could not compete using 3rd part shipping companies.
Now they are doing the same thing in their home market.
You are correct JD didn't exist back then since it used to be called 360buy and they used 3rd party shipping companies.
After becoming JD they started shipping themselves. Not sure about the year.
Probably right about JD but as far as I know Amazon didn't start doing logistics till after 2013.
Am I wrong about the dates?
In reality logistics is capital and labor intensive industry, Amazon will have trouble once the retail growth flatten but the cost structures are high. Amazon once unionized will have similar challenges and costs like UPS.
This is the reason FedEx never want to be unionized.
I'm not sure about TMall but I know that in Beijing they used to have a distribution point roughly every 10km through the whole city.
When you used to setup your address you selected the closet distribution center to you (I assume because the maps were not setup then. You don't select it any more.)
When I buy packages in Shanghai about half of them are delivered through a 3rd party and the rest are direct. It may just be my area though. I assume it depends where the product is come from...