Online retailer Amazon.com has been looking for a while to find a way to have more control over how its packages are delivered.
Your Amazon packages, which usually show up in a UPS truck, an unmarked vehicle or in the hands of a mail carrier, may soon be delivered from an Amazon van. Amazon-branded vans will be available to lease and Amazon-branded uniforms can be bought for drivers.
Amazon has negotiated discounts for approved entrepreneurs, including lower rates on insurance, fuel and leases for Amazon branded vans that have been customized inside for package delivery. Naturally, United Parcel Service (UPS) and FedEx (FDX) fell on the news, as investors fret about Amazon turning from blessing to curse for the delivery giants.
In the latest development, Amazon, which played a crucial role in raising shoppers' expectations for near-instant gratification in recent years, announced plans Thursday to assemble its own fleet of delivery vans that would be operated by independent contractors.
Amazon says skilled entrepreneurs could start businesses for as little as $ 10,000, although this does not include the cost of hiring drivers. Dave Clark, Amazon's senior vice president of worldwide operations, said the new program is not a response to the president, but a way to make sure the company can deliver its growing number of orders. The move comes as President Donald Trump has complained about the postal service undercharging Amazon to deliver packages.
Amazon said in a release that owners of these delivery businesses have the potential to earn as much as $300,000 in annual profit operating a fleet of up to 40 delivery vehicles.More news: White House official 'unaware' of Trump's plans to exit WTO
But labor professors say the arrangement allows Amazon to reap the benefits of a vast delivery network without having to shoulder numerous risks and liabilities involved.
It's unclear if Amazon will cut back on its postal deliveries in favour of its own and how quickly that could happen.
Clark said he expects the companies to join the program with 20 to 40 trucks will employ about 100 drivers.
Amazon's dependence on services like USPS, UPS and FedEx, which now deliver the bulk of its packages, also has downsides.
Probably not. There are more packages to be delivered besides the ones shipped by Amazon. The contractor will be responsible for hiring delivery people, and Amazon would be the customer, paying the business to pick up packages from its 75 US delivery centers and dropping them off at shoppers' doorsteps.