Amazon Logistics Seen as Way to Owning a Delivery Business
Amazon.com has nearly 200 warehouses, a fleet of trucks and airplanes, and even its own delivery drones — yet the company has determined that is not enough to satiate its booming demand.
At the end of June, the online retailer rolled out its new delivery initiative that puts more feet on the ground and more vans on the highway.
Unlike its other delivery methods that focus on partnering with pre-existing companies and private individuals, Amazon Logistics works to increase delivery capacity while helping people mitigate the risks of starting their own business.
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“This new program empowers more individuals to get into logistics and ride with the tide of commerce,” Amazon spokesperson Amanda Ip said.
For a minimum of $10,000, residents of large U.S. metro areas can open and manage their own delivery companies. Amazon provides three weeks of initial logistics training along with negotiated pricing on up to 40 Amazon-branded vans, licenses and insurance, equipment, uniforms, and of course a seemingly endless demand of packages.
The company also has committed $1 million to funding military veterans’ startups.
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With demand increasing and membership growing, the retailer sees Amazon Logistics as another way to guarantee the free two-day shipping included with Amazon Prime purchases.
“Meeting our capacity needs five years, 10 years, 15, 20 years out in the future is going to require lots of incremental capacity for delivery,” Dave Clark, Amazon vice president of worldwide operations, said in a statement.
In 2015, the company launched the Amazon Flex program, which operates like an “Uber” for delivery, allowing individuals to pick up packages from Amazon warehouses and deliver in their free time for $18 to $25 per hour.
Amazon Logistics takes its partnership with metro-area residents to another level, projecting that the small-business owners of Amazon Logistics-supported companies could earn as much as $300,000 a year delivering packages.
Olaoluwa Abimbola, a beta tester in the pilot program and owner of Aurora, Colo.-based delivery service En Route Logistics, is one such example.
After moving to the United States from Nigeria, Abimbola worked an IT desk job and delivered packages for Amazon as a Flex deliveryman on the side. He told The Denver Post that while he had always wanted to own a business, he never knew where to begin.
Since launching in January with just five vans and eight employees, En Route Logistics has grown to include a combined 42 full-time and part-time employees and 20 vans.
“[Amazon Logistics] is a whole lot better,” Abimbola said. “I didn’t have to go out there and do research and advertising and marketing. The potential to grow is always there. That’s a major difference between this and Flex. Flex was just me — something I did in my free time. This is not a gig, this is a business.”
However, with Amazon adding yet another delivery method to its arsenal, questions have arisen about the company’s intentions. To some, the program appears to be the first step in preparation to start severing ties with longtime partners such as the U.S. Postal Service, UPS Inc. and FedEx Corp.
UPS ranks No. 1 and FedEx No. 2 on the Transport Topics Top 100 list of the largest North American for-hire carriers.
Ip said Amazon Logistics is simply another way the company continues to invest in transportation infrastructure, citing the potential creation of hundreds of new businesses and tens of thousands of jobs.
“We have a long history of empowering small businesses,” she said.
The numerous delivery initiatives, Ip said, are simply meant to complement one another.
With another Amazon Prime Day come and gone, the demand continues to grow along with the country’s largest metro areas.
Abimbola only hopes that he and his team of blue vans can keep up.
