Amazon’s plans to build a delivery network for their Prime Day program are being heralded by some as the first sign of them to expand beyond their namesake retail app. The e-commerce behemoth intends to open new centers across the United States, over the next three years, where they’ll deliver smaller package parcels by drone to people’s doorsteps, and on their schedule of choosing.
Unlike FedEx or UPS, the plan was initially not seen as a major threat, considering that Amazon Prime customers typically don’t order specific items with the express intent of receiving them the next day. The highlight of Amazon’s booming business has been their fast shipping options, Prime Now, which offers delivery within the hour. Today, Prime Now service is said to have some 15,000 destinations across the United States.
However, a new segment of customers have been reaching out to Amazon over delivery schedules, and are expecting to receive more of the package in its final destinations, along with accurate tracking information. For example, customers are demanding that their packages get to them on the day of arrival, not the day that the sender first requested.
“If you live in the modern economy,” Amazon CFO Brian Olsavsky told analysts last September, “there is a big difference between having a promise of faster deliveries and then actually having that delivered on that timeframe.”
Instead of forging ahead, Amazon’s solution is to recreate its current delivery network. Attracting traditional distribution companies, such as FedEx, to give Amazon trucks to run their own delivery service is an obvious move. By using a controlled network, it avoids the risk of unexpected variations in the frequency of deliveries.
Amazon’s network is clearly unique from the average postal services’, in a way that precludes traditional corporate competition. Delivery companies are also less involved with the logistics and have less exposure to the customer. Yet, in the eyes of many, the investment in building out this network is already too great for Amazon to bear.
“The human cost of this is too much,” the National Union of Postal Workers’ (NUPW) representative Victor Belamant told the New York Times. “Efficiency doesn’t take into account the cost to the individual,” he explained. “Why do we have to foot the bill?”
However, the fear that these cheaper options will constitute increasing competition among companies and endanger delivery workers’ jobs is not shared by everyone. According to many Amazon customers, including GetElden in the United Kingdom, being able to choose and receive their package on the first of the month is more than enough incentive to support them in their choice. Amazon’s business strategy, in general, seems to bode well for drivers, as it places more demand on them in terms of deliveries.