Amazon Buys Thousands of Branded Truck Trailers
Amazon.com Inc. has bought thousands of truck trailers featuring its Prime logo to move goods among its warehouses, according to media reports.
The trailers will be used to move products among the company’s warehouse and its sort centers, where it organizes orders by ZIP code to be delivered locally, the tech news site Re/code reported.
The company said it still will rely on its trucking partners to drive the trailers, and they will not be used to deliver goods directly to customers’ homes.
Amazon uses a mix of companies, including UPS Inc. and FedEx Corp., along with the U.S. Postal Service and local couriers, to deliver goods from more than 100 distribution facilities in the United States and 180 facilities worldwide.
Amazon may be opting to only own the trailers, and not the trucks.
“One guess on why Amazon only wants to own the trailer at this point: If it owned the tractor, it would have to register as a commercial trucking company and incur the insurance costs and liability risks that come with that. By sticking with just the trailer body, Amazon potentially saves money and avoids other potential headaches,” Re/code reported.
While the company only owns the trailers at the moment, it reportedly has begun recruiting executives to eventually develop its own delivery fleet, according to industry sources and recently published reports.
“We believe certain segments of the logistics market, namely last-mile parcel delivery as well as the much larger contract-logistics space, are areas in which Amazon could provide a compelling alternative to traditional shipping/logistics providers,” Colin Sebastian, an analyst with Baird Equity, wrote in a recent report about the rationale for Amazon using its technological and distribution capabilities to begin hauling goods for itself and others.
“Amazon may be the only company with the fulfillment/distribution density and scale to compete effectively with global providers,” Sebastian wrote in the report. “We would expect Amazon to introduce competitive transportation and logistics services on an incremental basis [but] with a long-term focus.”
The trailer announcement comes after the company showed off its unmanned package delivery drone. A video launched Nov. 29 shows the drone’s capabilities and its new look.
"In time, there will be a whole family of Amazon drones. Different designs for different environments," television show host Jeremy Clarkson says in the video.
Clarkson said the drone in the clip could fly for 15 miles and is equipped with what he called "sense-and-avoid technology" to sense, then avoid, obstacles in its path. The video shows the drone approaching its targeted landing spot, dropping the package, then taking off again, presumably to return where it came from.
