For years, Amazon has been laying more and more groundwork for its own logistics and delivery network — one that today only ships and delivers Amazon orders, but could someday do much more in a direct challenge to UPS, FedEx and the U.S. Postal Service.
Today, it is taking another big step toward that potential reality — even if it won’t say so for now.
The e-commerce giant is unveiling a program meant to fuel the creation of hundreds of new package-delivery businesses that can help Amazon handle the fast growth that its U.S. retail business continues to enjoy. Amazon says the program will offer new partnering delivery companies access to discounted rates on everything from fuel to vehicle insurance to delivery vans, as well as coaching from Amazon and an app to guide delivery people on which order should be dropped off when.
As part of the launch, Amazon is also introducing its own Amazon-branded delivery vans that partner companies can lease, as well as uniforms that delivery partners can outfit their drivers with. Amazon claims that new partners can start up their business for as little as $10,000 — an amount that the company will reimburse to businesses founded by U.S. military veterans.
Taken together, the moves highlight the challenge Amazon continues to have securing enough delivery capacity to keep up with the growth of its business — and its continued preference to outsource this crucial function rather than take on the costs of salaries, insurance and benefits that would come from employing a giant delivery team in-house. Amazon already partners with small and mid-sized delivery companies across the country in addition to UPS and the U.S. Postal Service, and says it needs more help.
But at the same time, the introduction of Amazon-branded delivery vans and uniforms could lend credence to all the reports that Amazon’s long-term goal is to directly challenge the major parcel delivery players like UPS and FedEx. After all, typically the more volume of packages you have running through a delivery system, the more efficient that system will be.
Amazon knows this, so each time it introduces a new delivery initiative — like Amazon Flex, which lets individuals deliver Prime Now packages on Amazon’s behalf — the company’s message is the same: We are not looking to replace the big delivery companies, but rather supplement what they do.
This time is no different.
“We have great partners in our traditional carriers and it’s exciting to continue to see the logistics industry grow,” said Dave Clark, Amazon’s senior vice president of worldwide operations, said in a statement. “Customer demand is higher than ever and we have a need to build more capacity. As we evaluated how to support our growth, we went back to our roots to share the opportunity with small-and-medium-sized businesses.”
Amazon says these delivery partners can make deliveries for other companies too, but not if they are using one of the new Amazon delivery vans. So the message from Amazon seems clear: if you’re working with us, we should be your priority.
Perhaps Amazon’s own e-commerce growth will be enough to fuel long-term growth and expansion inside the new delivery companies that Amazon is now trying to help birth. But it seems just as plausible that Amazon vans will one day be carrying parcels from other companies in addition to its own.