If the trajectory of Amazon’s business model continues, it appears on pace to overtake all last-mile delivery leaders.
The household name e-commerce corporation more than doubled its last-mile deliveries from 1.9 billion in 2019 to 4.2 billion in 2020. With the 2021 holiday season in full swing, Amazon trucks litter nearly every community. And with supply chain disruptions causing empty retail shelves, Amazon emerged as a reliable resource.
“There are structural advantages you have in redundancy if you’re Amazon,” former Amazon logistics software employee Jason Murray reportedly said. “Amazon has its own transportation network. It has access to all the carriers. Multiple ships, multiple factories.”
Transportation and logistics insiders may not have seen the rise of Amazon coming. After all, USPS has been a mainstay leader in last-mile fulfillment. But USPS is no longer necessarily an unchallenged king of the hill. The quasi-governmental postal and parcel service slipped to only 38 percent market share, with UPS (24 percent) and FedEx (16 percent) trailing. Amazon Logistics has elbowed its way into the Top 5 at 21 percent, based on recent reporting.
“When you look at Amazon overall, I’ve always seen them not only as a technology company and a retailer, but I’ve also seen them as a fulfillment company, a fulfillment provider,” Rachel Dalton, director of e-commerce and omnichannel at Kantar, reportedly said. “The fact that they advanced beyond FedEx by that much, that I find impressive.”
By year’s end, the internet-to-doorstep product provider may very well be rivaled only by the USPS.
Building an infrastructure that did not rely on transportation outfits such as FedEx, UPS, and even the USPS, to a large degree, positioned Amazon Logistics to effectively create an independent and independent supply chain. Product manufacturers who work with Amazon tout the wide-reaching benefits. Some point to regional facilities housing adequate inventory to allow consumers to make purchases and receive delivery before the holidays. Others indicate that Amazon’s internal logistics operations offered container rates as low as $4,000 at a time when others charge $12,000 or more.
“They basically went from zero containers a month a few years ago, to over 10,000 containers a month,” sea freight expert Steve Ferreira reportedly said. “The thing is an 800-pound gorilla now.”
The sheer speed of Amazon Logistic’s rise in the transportation sector and market share are reasons to believe the behemoth will secure the number 1 spot in the near future. The year-over-year growth from 2019 to 2020 by its competitors reportedly stood a UPS (13 percent), FedEx (22 percent), and USPS (34 percent). Amazon posted a staggering 127 percent year-over-year growth during the same period. While none of its competitors cracked 40 percent year-over-year revenue growth, Amazon Logistics shot up by 109 percent.
Sources: ttnews.com, modernretail.com
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