Sunday, 27 May, 2018

Amazon Moves to Launch Its Own Delivery Fleet

Amazon prepares to launch its own courier service for businesses Amazon shares news: 'Shipping with Amazon' to disrupt delivery sector
Preston Stone | 15 February, 2018, 17:02

The The Wall Street Journal first reported on Amazon's delivery service plans.

The initiative is set to be rolled out in Los Angeles for a trial period, with a view to extending it across its wider network in the near future.

"Amazon's move to add delivery services for their business customers is a demonstration of how they are working to enable end-to-end, customer-centric experiences for everyone", said Scott Webb, president of Avionos. However, Money also notes that with $178 billion in sales and $3 billion in profit previous year, along with cash reserves estimated to be more than $20 billion in cash, Amazon is uniquely placed to launch its own air and land P&D service should Bezos give the marching orders. Baird identified shipping services as a $400 billion to $500 billion market opportunity for Amazon.

UPS's stock was down 0.71% at $105.63 per share.

The experiment is expected to launch sometime later this year in the Los Angeles area with a handful of companies that sell goods on Amazon's site, sources familiar with the project who asked to remain anonymous because they weren't authorized to speak publicly told USA TODAY.

Amazon is a company that focuses on continually pushing the envelope and experimenting with ways to shorten delivery times and reduce costs. Right now, if a third party seller from amazon.com ships directly to a customer, Amazon loses track of that package. "Operating its shipping services could also offer a way to negotiate better prices with the outside delivery companies".

Sebastian Janikowski Won't Return to Raiders After 18 Seasons, Hits Free Agency
Last season, Janikowski agreed to take a million-dollar pay cut and then dealt with a back issue which cost him the entire season. Oakland selected Janikowski out of Florida State with the 17th overall pick in the 2000 NFL Draft.

Baird analysts again see this as another step toward offering "shipping as a service" much like Amazon Web Services, which has become a major cloud computing provider, noting Amazon's drop shipping and FBA Onsite programs.

According to online statistics company Statista, Amazon's shipping revenue in 2016 was $8.98 billion while its outbound shipping costs were $16.17 billion. For instance, Amazon leases 40 cargo jets and has about 300 US fulfillment facilities including sortation centers, numbers that are dwarfed by the carriers.

"But for the vast majority of products moved, it's nearly certain that they're going to be moved, they're going to be delivered by one of those three networks and some of the smaller regional players, as far as the eye can see", Smith added.

In 2017, they threw down $1.4B toward the development of an air freight hub that will soon support 100 planes and 2.7k employees.

While entering the shipping and delivery space seems the most logical move for Amazon, it will not be a simple exercise.

Amazon recently announced that it's doing the same - taking an active role in delivery of the sales it makes - with groceries in several cities.

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