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: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.