Amazon.com released figures today demonstrating tangible results of its logistics expansion efforts.
The Seattle-based e-tailer revealed that its last-mile delivery network is on pace to deliver 3.5 billion packages internationally this year. In comparison, UPS delivered 5.2 billion packages across the world in 2018.
Amazon has been aiming for greater control over the “last mile” of package delivery, working to build its own delivery network rather than depending on USPS, UPS and FedEx. According to a July report from Rakuten Intelligence, Amazon now delivers about half (48%) of its own packages — a sizable shift from 2017, when USPS handled the majority (60%) of the e-tailer’s deliveries.
As it expands its logistics operations, Amazon has made an additional investment in one-day shipping for its Prime members. The initiative was originally expected to cost $800 million, but during its Q3 earnings call in October, Amazon said it had revised its forecast and now estimates it will spend $1.15 billion on shipping-related costs over the course of the fourth quarter. To aid its efforts, Amazon says it now employs more than 90,000 logistics associates across 150 delivery stations.
Watch on FN
In addition to its in-house logistics network, Amazon currently has 800 employees through its Delivery Service Partners Program, which began in 2018. Employees accepted into the program are expected to manage a fleet of 20 to 40 vans, as well as to manage between 40 and 100 people. Amazon gives them $10,000 to start their operations, which are managed as s small business. The network employs 75,000 drivers.
Another arm of Amazon’s logistics network, Amazon Flex, hires independent contractors to use their own vehicles to deliver packages. Drivers cover expenses such as gas, car maintenance and tickets, which may occur if they park illegally to make deliveries.
Amazon Confirms It Is Opening a New Office in Manhattan in 2021
How Retailers Can Register Healthy Holiday Sales With a Successful Shipping Strategy