Amazon: The New AMAZON of Shipping?

April 6, 2018
Author: Caroline McManus

Sure, at face value delivering its own packages seems like a logical move for Amazon. The online retailer shipped a jaw-dropping 5 billion items in 2017 with Amazon Prime alone. Now, all signs indicate that Amazon is set to launch a delivery service that would vie with FedEx and UPS in the important business-to-consumer market.

 

The program, Shipping with Amazon (SWA), is piloting in the Los Angeles area and is expected to expand to other cities around the United States soon. As part of SWA, Amazon will pick up packages right from their third-party retailers and warehouses and deliver them directly to consumers. Further, SWA advances Amazon’s earlier inroads into logistics and delivery, following the company’s leasing of aircraft and ocean freight equipment.

Consider that Amazon has an estimated 90 million Prime members as of September 2017 and each member spends an average US$1,300 on the e-retail platform each year, compared to the US$700 spend of non-Prime members. 

Chances are if you don’t have a membership yourself, a family member or close friend has one! Amazon has led the way in understanding and delivering on consumer’s expectations. Controlling logistics and delivery is another way the company can further improve shipping time and cost, and sustain and grow their customer base.

Does this mean gloom and doom for FedEx, UPS and USPS?

While most people agree that Amazon plans to undercut the major carriers where they can, Amazon can’t be and won’t be everywhere and everything to the shipping industry. There’s still the massive business-to-business market and consumer items—and locations—that the carriers will own and even deliver to on behalf of Amazon.

We’ll keep you updated as the story unfolds.

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