Amazon Looking To Abandon UPS, FedEx In Favor of Its Own Delivery Service (arstechnica.com)

An anonymous reader quotes a report from Ars Technica: A report by The Wall Street Journal claims that Amazon is building its own shipping service to replace FedEx and UPS, giving it more control over its packages and possibly allowing it to ship packages from other retailers. Amazon has said its own delivery services would be meant to increase its capacity during busier times of the year, like the upcoming holiday season. However, "current and former Amazon managers and business partners" claim that the company's plans are bigger than that. The initiative dubbed "Consume the City" will eventually let Amazon "haul and deliver" its own packages and those of other retailers and consumers. That delivery network would also directly compete with the likes of UPS and FedEx. It makes sense that Amazon would want to sell, ship, and deliver orders on its own. The report estimates that the company spent $11.5 billion on shipping just last year, amounting to 10.8 percent of sales. The shipping process is currently a bit convoluted: packages from Amazon warehouses get sent to one of two shipping routes, either FedEx or UPS, or to a sorting facility that lumps all packages with similar zip codes together. FedEx and UPS handle its shipments and deliver them to customers, while the packages at the sorting facilities either get delivered via USPS or by Amazon employees themselves. If Amazon were to have control over its shipments over longer distances, it's estimated that the company could save about $3 per package -- about $1.1 billion annually.

Comments

First it was Uber.

[BarbaraHudson]

Uber took away the taxi driver jobs, but I didn't say anything because I wasn't a taxi driver.
Amazon took away independent courier jobs, but I didn't say anything because I wasn't a courier.
You know how this ends ...

Re:First it was Uber.

[ArtemaOne]

They didn't take anything. They were competitive and surpassed their competition economically with better business models.

Re:First it was Uber.

[BarbaraHudson]

Competitive? That's not how I'd spell operating an illegal public transport business.

Re:First it was Uber.

[squiggleslash]

It's easy to gain a competitive advantage if you have more or less the exact same business model, but ignore the laws and regulations that govern your competitors.

Re:First it was Uber.

[drinkypoo]

People used to say that house prices would never go down ... until they did. We're still experiencing the financial hangover.

That was a brief moment, it was manipulation, and now we're "enjoying" record high prices because of more manipulation. The banks are sitting on multiple empty houses for every homeless man, woman and child in America — while homelessness is at a high not seen since the Great Depression. So is unemployment, if you measure it correctly. That means looking at the inverse of the workforce participation rate, and not just counting persons eligible to receive unemployment benefits which is how the official number is calculated.

People used to say that a degree was a guarantee of a job ... until nowadays it mostly isn't.

It never was. People just said that. Or, it still is, but now it's a PhD or a Master's, not just a Bachelor's.

People used to say that oil the days of cheap oil were over because of decreasing supply ... now we're in a glut and prices tanked.

The amount of oil production is similar to what it was previously. Prices have tanked because OPEC is dumping oil. This is going to lead to a more severe cost increase due to decreasing supply in the future than what we'd have already had, since it's leading to less renewables since people buy less of them when oil is cheap.

North Korea used to be a pimple on the world's butt ... and now they have nukes.

Not for long.

The US used to be the number one economy - now China surpasses it in terms purchasing power parity (ppp).

They're heading for an economic crash that makes what's going on over here look like fluffy kitten time. They keep building stuff they can't use because they won't let their people have things.

$3 per package, eh?

[willoughby]

Well, maybe. You don't save $ by having "control over your shipments", you'd save by making your shipping system more efficient than alternative shippers. FedEx & UPS are pretty darn good at it and have a lot of experience. Trying to break into that game would be costly and maybe foolhardy. Just the fleet management alone could be enough to eat up any "savings". Selling the service to other companies in addition to delivering your own stuff might work albeit not immediately profitable.

It might work out but I think you'd have to throw a lot of money at it to prime the pump.

Re:$3 per package, eh?

[ScentCone]

And I'm sure they won't drop the already ridiculous price of a Prime membership either.

If you do regular business with them and think that price is "ridiculous," then you're a fool and shouldn't use math for any other important tasks in life.

Re:USPS

[bobbied]

Seriously, loosing the USPS won't be a good thing in the long run.

It's easy to overlook all the good things the USPS does for this country and it's economic system because we have all grown up with the mail arriving 6 days a week, rain or shine, for nearly nothing. First class postage is still under $1 for a letter picked up and delivered door to door, usually in a few days. It's a huge bargain if you ask me. Priority Mail goes for $4 and gets there in less than 3 days. This kind of service keeps this economy going. I understand that the USPS isn't as necessary as it once was, and that's part of it's financial problems, but I believe it's still a necessary function.

What's UPS going to charge you for a letter? $10? $5? And then they just drop the letter off at the local post office for delivery to your door usually. Same with FedEx. DHL (back from bankruptcy I suppose) doesn't deliver to residential customers and I haven't seen their prices. USPS delivery is a bargain and throwing out all that will only hurt us all.

Perhaps we could scale back delivery days and save labor costs. Say three days a week to the door and only weekday delivery to P.O. boxes? That would drop about half their labor costs, keep service levels high for those who need it, and perhaps allow the USPS to get back to even instead of loosing money all the time.

Re:Good!

[jcr]

I have no complaints with FedEx, but UPS has always been a shitty vendor.

-jcr

Re:USPS

[Nikkos]

They cannot die soon enough. 95% of my mail is paper spam that goes straight into the trash. The rest is either packages (that could go by UPS instead) or bills from Luddite companies that are too dumb to figure out how to save money by sending e-bills.

USPS is faster and cheaper for 90% of the stuff I ship or receive, I've got no complaints. As for the junk mail, blame the credit card companies.

I haven't sent or received a personal letter in over a decade. Why would anyone prefer that over email?

No cards? No official mail? Not much of a life eh?

Plenty of countries no longer have a government run postal service. They are doing just fine.

Our postal service isn't really government run (well, depending on your definitions I guess). It's a self-financing entity that has a bit of government protection while the employees are considered civil servants. As long as it's self-financing, there's really no reason not to have it around.

Re:USPS

[Anonymous Coward]

sweet, could you show me how that lets me send the original signed documents through that? what about my package deliveries? how about my financial records where I need physical copies for tax audit purposes? I am glad you don't do anything of value in life that requires documents, the rest of us do!

Re:USPS

[MachineShedFred]

I don't understand people that complain about the USPS - it's one of the most impressive logistics operations the world has ever seen.

Can you come up with a better way to get a letter from South Florida to Anchorage, Alaska in a few days for less than $0.50? Neither can anyone else.