As if delivery drones weren’t enough, Amazon seems set on causing further disruption in the trucking and logistics industry. Reports emerged late last week that the internet-retail giant is exploring plans to launch its own parcel delivery service.
Known as "Shipping with Amazon," or SWA, the service will involve the online retailer picking up parcels from businesses and shipping them to consumers. It's expected to roll out in Los Angeles in the coming weeks, the Wall Street Journal has reported.
According to various news sources, including the Wall Street Journal and Money, Amazon, which helped launch the boom in online shopping and has taken the business to incredible heights, has been straining the capability of existing P&D (pickup and delivery) companies with the sheer volume of its online sales. Amazon founder and CEO Jeff Bezos has expressed repeatedly his desire for fast, efficient package delivery as an integral part of successful online retail sales, which led to the company’s now-famous experiments with home delivery drones beginning in 2015.
Now, it appears Amazon may be ramping up to follow through on its previously speculated intention to launch a proprietary P&D fleet. Money reports that the company recently leased 40 air freight aircraft and begun arranging maritime freight shipments from China while quietly building up a new force of urban delivery drivers.
Money notes that UPS and FedEx have downplayed the threat of an Amazon delivery service in the past, pointing out the massive investment and time required to put an air and ground delivery network in place that could rival their own businesses. However, Money also notes that with $178 billion in sales and $3 billion in profit last year, along with cash reserves estimated to be more than $20 billion in cash, Amazon is uniquely placed to launch its own air and land P&D service should Bezos give the marching orders.
Regardless of how aggressive any Amazon move into the P&D space might be, it is likely the online retailer would have to continue to use both UPS and FedEx, as well as other shippers, for quite some time until any proprietary P&D fleet was able to handle the company’s massive volume of freight on its own. This has led some industry watchers to speculate the latest moves by Bezos and Amazon are intended to leverage better shipping rates and service from shippers.