It appears that Amazon is sick and tired of relying on UPS and FedEx to get packages to customers, and they are looking to take control of the situation–or at least do a little bit of the work themselves.
The Wall Street Journal reports that Amazon is currently working on its own delivery network, one that has been internally referred to as the "Last Mile." That's because the delivery network wouldn't be a full, nationwide chain of trucks taking packages from the very beginning to their destinations. Instead, Amazon wants to focus its energy on the last leg of a package's journey. Apparently, Amazon's test involves a fleet of Amazon trucks, driven by contractors.
Of course, eventually, this could be seen as a direct competitor to UPS and FedEx. Right now, UPS and FedEx are nearly fully responsible for delivering Amazon packages.
The WSJ cites a job posting on the Amazon website, which mentions intentions for a "last mile" service.
"Amazon is growing at a faster speed than UPS and FedEx, who are responsible for shipping the majority of our packages. At this rate Amazon cannot continue to rely solely on the solutions provided through traditional logistics providers. To do so will limit our growth, increase costs and impede innovation in delivery capabilities Last Mile is the solution to this. It is a program which is going to revolutionize how shipments are delivered to millions of customers," said the posting.
Although Amazon has been mulling this over for a while, the impetus to really get going reportedly surfaced last holiday season, when UPS and FedEx delays resulted in a lot of pissed off, package-less customers.
As of right now, this is only being tested in a couple of big distribution areas and is a long way from being fully realized. But it's interesting that Amazon feels that it can't survive in the current model, especially when Amazon keeps adding to the list of products they're shipping. Amazon released their earnings on Thursday, and although sales were up, profits didn't jump proportionally.
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