Amazon are reportedly recruiting high level executives to set up it’s own fulfilment operations in the US. It should really come as no surprise as we watch the roll out of Amazon Logistics in the UK.
US carriers such as USPS and Fedex and UPS which Amazon currently use will no doubt be running scared, and so they should. The volumes that Amazon can take from the incumbent carriers is staggering and with an estimated 50,000,000 Amazon Prime customers in the States there are a lot of parcels from which revenues could be lost.
Amazon do of course already have some small operations in the States to run their Prime Now service in cities such as San Francisco, San Jose, San Antonio, Houston, Twin Cities, New York, Los Angeles, Boston and Seattle. They also run AmazonFresh in San Francisco, New York, Los Angeles, Seattle, Center City and San Diego.
We’ve seen in the UK the rate at which Amazon are willing to invest in their own courier service. I hardly receive a single parcel from Amazon except from Amazon Logistics now I’m within range of one of their depots.
According to ChannelAdvisor’s Scot Wingo Amazon now have 104 Fulfilment Centers in the US, up 15 from 2014. That’s no where near the number they’ll need to run their own courier service, but as we’ve seen in the UK it’s a base from which to build a hub and spoke network. Fulfilment Centers ship orders to local delivery depots which contract out with local courier firms to fulfil the last mile delivery.
Amazon Logistics delivery depots in the UK only employ around 20 warehouse staff on average, but they each support over 100 local courier drivers who effectively work full time for Amazon. It’ll be well into 2016 before we see this being replicated in the States, but there’s little question that it will happen, especially in the highly populated urban areas where the velocity of Amazon sales justifies the investment.
