Amazon to grow its existing delivery service community

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Amazon to grow its existing delivery service community

By Deena M. Amato-McCoy - 06/29/2018
Amazon wants to help entrepreneurs run their own local delivery network — one that transports Amazon packages.

The online giant is looking to bolster its existing community of delivery service partners through a new program that will help entrepreneurs build a company focused on delivering Amazon packages. The program will provide individuals with the technology and operational support needed to manage their own delivery business.

With a startup cost of $10,000, owners will gain access to the Amazon’s delivery technology, hands-on training, and discounts on other resources required to operate a delivery business. These include leases on a fleet of up to 40 Amazon-branded delivery vehicles, comprehensive insurance, branded uniforms, and fuel, among other services.

Amazon estimates that an owner could earn up to $300,000 a year in annual profit by operating a fleet of up to 40 vehicles. Over time, Amazon expects to bring on “hundreds of new, small business owners to hire tens of thousands of delivery drivers across the U.S.,” according to the company.

These entrepreneurial delivery teams will join Amazon’s existing community of traditional carriers, as well as small-and-medium-sized businesses already delivering Amazon packages.

“Customer demand is higher than ever and we have a need to build more capacity,” said Dave Clark, Amazon’s senior VP of worldwide operations. “As we evaluated how to support our growth, we went back to our roots to share the opportunity with small-and-medium-sized businesses. We are going to empower new, small businesses to form in order to take advantage of the growing opportunity in e-commerce package delivery.”

The move further highlights Amazon’s position on using less conventional delivery options.

“Amazon’s news of building out a parcel delivery network shows that not all truck space has to come in the form of traditional, legacy fleets,” said Mike Williams, CEO, uShip. “Underutilized, albeit fragmented capacity is out there — one just needs to know how to tap into it, whether it’s for shipping clothing or couches.”

This program is Amazon’s newest attempt at making its supply chain more efficient. Recently, the online giant established its “Amazon Logistics” operation, a cross-border service currently available to sellers listing on the Amazon platform. The retailer also continues to develop its air freight solutions and services, and plans “to quickly introduce it to a large number of our sellers,” according to the Amazon Logistics website.

In 2017, the company announced it would build an air cargo hub in Kentucky, which will be home base for its leased air fleet of 40 Boeing cargo jets — a program it calls Prime Air.

Meanwhile, the online retailer dipped its toe into the freight forwarder waters last year, a move that allows Amazon to control shipments between manufacturers and distribution points.

In November 2015, the company purchased thousands of trailers pulled by tractor trucks provided through partnerships with third-party transportation firms. These vehicles shuttle inventory throughout the supply chain.

The company is also in the midst of testing delivery drones.

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