Both UPS and FedEx deliveries arrive at my front door in good condition, the delivery drivers bag the packages up if I'm not home and it looks like rain.
USPS consistently rings my doorbell and makes sure packages are handed to me rather than left outside.
Amazon delivered packages have been: thrown from the street; arrive crushed, punctured, or otherwise damaged; left in the driveway; left in the neighbors yard; never ring the doorbell, unless it's after dark, and then they ring and run.
Amazon's last mile service is a complete shit show, impressively worse than the random cut rate last mile delivery services they used when they were trying to force UPS and FedEx to lower prices.
I think service for any of these companies is highly variable and dependent upon locale. Perhaps it's a culture thing.
The USPS worker never rings my doorbell for left packages and just yesterday a package was delivered damaged in my mailbox.
I live in a nice part of town (I think) but the service culture here may be different than where you live (and different than other locales where I've resided).
Completely agree. Multiple times I've had USPS drivers report packages as "delivered" late in the day when they were not delivered at all, then they are actually delivered the next day. Sure makes their metrics look better, though.
> Amazon delivered packages have been: thrown from the street
i watched a USPS driver do that. i'm amazed he could heft the package that far.
> USPS consistently rings my doorbell
i don't know that they've ever rung my doorbell.
> Amazon's last mile service is a complete shit show
they all vary in quality by location. fedex was nearly unusable at my last residence, but is great where i'm at now. anecdotes simply aren't valuable here.
Only amazon rings my doorbell and it’s annoying as shit. My dog goes crazy and all because my toilet paper is here. Jesus Christ nothing ever got stolen ever in the history of ever here, don’t ring the bell.
Any packages from Amazon that have been delivered by its independent contractor delivery people have always been photographed sitting by my front door.
I live in apartment building with ~100 units, lots of Amazon packages and many from independent contractors. I've never even heard of this, and can't imagine them bothering.
I also live in a complex with over 100 units and yet Amazon still manages to track my packages effectively, take pictures, etc, so I'm not sure what the point is. Different delivery people treat packages differently?
My point is that I live in a large building with a lot of people and amazon doesn’t require their serfs to to take pictures, nor was I aware that happened anywhere, nor can I imagine them bothering, as they barely seem capable of doing what they’re contracted to.
Doesn’t bother me, I always select the longest wait anyway.
Contrary but also anecdotal evidence. Many ebay sellers use FedEx and it sucks a lot. The deliveries are constantly delayed. No issues with Amazon timing/packages from Amazon, except that they occasionally not brought to the package room and left near mailboxes (I live in apartment complex)
disc: I'm Amazon employee, not in Retail (anymore)
Am I correct in thinking that the last mile delivery solution from Amazon strictly relies on independent contractors or do they have corporate trucks/drivers?
IIRC, it's all independent contractors. Whether it's an independent company contracted by Amazon (which is the bulk of it), or a direct Lyft/Uber-style gig economy model of sourcing contract drivers.
Currently both Amazon and FedEx both use independent contractors (sorry, entrepreneurs) - and your experience will vary widely with the contractors operating in your area. We always groan when FedEx is doing the delivery, because in our area that usually means two or three days of 'missed deliveries'.
They have at least some corporate trucks/drivers in at least some locations. Though without inside data it's impossible to say what proportion, but anecdotally it seems to be mostly independent contractors in Seattle.
You're being downvoted, but you're not wrong. Amazon's deliver is terrible for me as well, never had a problem with UPS or FedEx (USPS is slightly less reliable, but still WAY better than Amazon).
I suppose that Amazon, at least the retail sales part of it, is essentially a shipping company. No surprise that it would build out over time, plus you'd be silly to trust them as a single huge customer.
One sentence in that article that I like was mentioning Amazon purchasing of dead malls. I had to thump myself in the head..'of course'. I've always wondered what would happen to those facilities and mini storage and fulfillment centers are good ideas.
Maybe we could ship Amazon direct to mini storage and cut out the middle man. Making 'too much stuff' more efficient seems like a genuine plan.
In any e-commerce business you have challenges like:
1. Getting traffic to online store.
2. Converting it to sales.
3. Able to deliver it to customers in time.
4. Service the complaints or product in time.
Out of this website traffic is directly linked to assortment and sales is directly linked to price (value for money vis a vis quality) and delivery besides traffic. Logistics i.e. storing, sorting and last mile delivery is one of the toughest challenges to solve in this business. Amazon used UPS, FedEx and USPS in the beginning to help them understand how its done, acquire expertise. They took that knowledge and than applied technology to solve some of the challenges and reduce costs.
It was just a matter of time they become full logistics company, because in reality every retailer and distributor is primarily a logistics company with stores, warehouses and distribution center.
So it's hardly surprising they are competing with them. But I feel UPS, FedEx still do many other B2B supply chain work like delivering components to manufacturing site, vendor managed inventory, defence supplies, government supply chain, Olympics, major events and sports supply chain etc. so there will still be room for them to grow.
interesting article, thanks for sharing it. I have been seeing more and more of these 3rd party contractor vans milling about and it makes since they're skimping on safety, etc. in order to get a piece of amazon's shipping needs, meanwhile amazon attempts to disclaim all liability while turning the screws and upping the pressure
Yep. The real question is how prevalent these "skimping on safety" companies are. When taken individually, no doubt it looks bad - but when considering that there are thousands of delivery partners, each having 20-500 trucks, delivering >5 million packages per day (per the article), I would expect to see a few incidents crop up.
For example, it's reported that FedEx drivers were involved in 41 deaths in 24 months:
> In the 24-month period prior to December 3, 2017, FedEx Express drivers were reported to have been involved in 1762 crashes, 575 involving injuries, including 41 deaths.
The big question is just how much Amazon is applying pressure and causing those sorts of issues, and are they outside of the normal expected incidents for logistics companies? WRT the Amazon delivery network, is this a matter of a few bad apple operators trying to squeeze every cent of profit by overworking drivers and not deploying more vans? Or is it a case of systemic unattainable expectations from Amazon that force every delivery partner to cut corners so they can maintain a livable profit margin?
Difficult to say from this article...but in spite of the sensationalism, the examples it recounts certainly aren't good.
I just find it amazing that Amazon found it more profitable to buy tens of thousands of delivery vehicles and build a service from the ground up than to find better deals through the available shippers.
Now I see their trucks nearly as often as Fed Ex and UPS.
For most of Amazon's existence they have been getting the best deal that they can with the available shippers, primarily UPS, FedEx, and USPS in the US. They negotiated lower rates than the shippers offer to consumers and businesses in exchange for guaranteed delivery volumes. Basically Amazon promised to ship X million packages per week with shipper Y in exchange for "below market" rates.
In response to shippers not doing what they want and to provide leverage, Amazon started to do their own shipping. This originally started as same-day delivery experiments in large cities as part of Amazon Fresh (grocery delivery service). It grew into non-grocery deliveries as a competitive advantage for Prime same-day deliveries and expanded from there.
I expect that "Transportation By Amazon" (TBA) where Amazon does package delivery as a competitor to UPS and FedEx will probably start in the next year or two, barring any anti-trust or legal problems.
I live in a South Florida county that has about 2 million people. I've never seen an Amazon truck before? The only shipped-by-Amazon deliveries I've received were from people in their own cars.
False, there are lots of last-mile Amazon delivery guys -- I live by a distribution center that has literally hundreds of Amazon-branded last-mile vans that deliver straight to my house.
The program you're thinking of is likely "Amazon Flex" which is just part of their last-mile delivery system and uses independent contractors.
Well the main reasons for not going horizontal are scale and volatility - which ammount to fixed costs essentially. If they can make a profit off of it then that implies cutting out the middlemen can potentially reduce expenses.
That said that they are /still/ smaller than Wallmart yet have scale sufficient to be competitive to mass shippers is amazing even considering the internet related physical letter shrinkage.
Much like AWS spun out of their in-house experience running flexible computing infrastructure, this would be a natural fit for them to flex their logistics strengths.
Via their multi-channel fulfillment offerings, you can already use Amazon's logistics network to ship your products sold on or off of Amazon. This would just be supporting more type of shipments than just fulfillment.
On the other hand, Fedex, DHL, UPS etc have built a big part of their strengths of shipping worldwide overnight. That's very different than what Amazon does, where they try to warehouse products close to customers to minimize shipping distance and time. Great when you want to buy an iPhone, but not suitable for shipping a document from New York City to Tokyo.
it's a good point, yet many still use Amazon/AWS regardless. Netflix, for instance (AWS). Then, on the micro-scale: FBA[0] sellers (Amazon Marketplace).
I assume it has to do with the ultra low barrier to entry which Amazon/AWS provides. The convenience factor is off the charts. Nevertheless, I assume Netflix has ideations of following in Dropbox's footsteps.[1]
[0] "Fulfilled by Amazon"
[1] abandoning AWS for self-owned dedicated infrastructure
It's a major issue with AWS across a bunch of sectors. I work at a large SaaS company transitioning to public cloud, the number of companies that contractually obligate us not to host on AWS is at least an order of magnitude higher than any other cloud provider.
"Transportation By Amazon" (TBA) has been a concept at Amazon since around 2010 or so. Originally the concept was that Amazon would accept shipments from business customers and inject those shipments into Amazon's sorting and shipping network using the rates negiotated with various carriers.
Since most of Amazon's negiotated rates with carriers are lower than what carriers offer to consumers directly, customers get lower prices and would benefit from Amazon's scale and customer service.
Now with Amazon's own transportation network finally taking off, Transportation By Amazon has gone from a concept that would have relied exclusively on third-party carriers (e.g. UPS, FedEx, USPS, etc.) to a likely reality with primary reliance on Amazon's infrastructure and supported by third-party carriers where Amazon does not have a robust prescence.
Given how often I've had packages thrown haphazardly by Amazon drivers, I will gladly pay extra to have USPS handle my packages with slightly more care. It's an interesting idea, but their drivers are destroying their image before they've entered the market.
Poor behavior by delivery drivers happens across all carriers, USPS included.
If your package is damaged, I would recommend contacting Amazon customer service and let them know. Based on the way they do scans and metrics, they know who the delivery driver was and it will reflect in the delivery driver's customer satisfaction score.
If there are enough compliants against a given delivery driver, they will probably not remain a delivery driver for long. Amazon wants to keep customers happy at all costs and will quickly sack employees and contractors who fail to meet their standards.
Additionally, I have yet to ever have a driver ring the doorbell. They throw it at the house, mark it as complete, and trust that I’ll stumble across it later.
I would recommend signing up for the Amazon TextTrace delivery notifications. There is a prompt to sign up whenever you place an order.
The notifications will send you a text message to your mobile phone or a push notification to the Amazon app on your smartphone as soon as your shipment gets delivered.
I don’t mind text notices, but it will always have a higher latency than ringing my doorbell. The best though is getting alerts about a delivery and then going on a scavenger hunt to find the package. Will it be on the front porch? Will it be tucked behind a bush? Maybe I left my garage door open so the driver helpfully left it there...
Ronald Coase would have loved Amazon and in particular this case. Amazon is quite unconventional in regards to what they choose to outsource and what they keep — or bring — in house.
Huh, missing from this article is the thousand or so DSP that service Amazon for shipping, basically contracting companies. A lot of Amazon shipping is actually Amazon corporate, but a huge chunk is a thousand smaller shops.
Turns out you can also contract with those shops as a private citizen to just ship random heavy stuff anywhere for super cheap. Because Amazon gives them enough volume, it's become cheaper for individuals to make their own shipping purchases too. Strange side effect.
I don't work for Amazon or anything, but my dad has used one of their DSP to ship some truly heavy stuff (250kg+).
Is all that in the "other"? Or did it get lumped in with Amazon's chunk? I want to know but the article doesn't help.
It's good for Amazon, but is it good for consumers? Isn't a postal service something of a natural monopoly — the more competing services there are, the less efficient each is, because instead of one vehicle with one load of deliveries, you have two or more vehicles with fractions of that amount?
It's certainly not good for the environment at least.
I think what he means is sometimes there is a benefit to having one service provider. For instance, it is cheaper if a city offers trash pickup in a district to one service provider. The logic is that it’s much more efficient to have one truck stop at each house versus trucks zig zagging around each other.
hm, being 'more efficient' would be true if the ideal way was known.
Waterfall would also be 'more efficient' if we knew the right product to make and way to make it. If agile has taught us anything it's that we don't know and we can't know. We learn through trial and error and continually innovate. If there is only one company there is no incentive to innovate and discover better efficiencies.
So while the 'logic' is right, the supposition[0] is incorrect.
This is why 'the market' is the best way in practice. We observe an ebb and flow of centralization (Amazon is a good example) and decentralization in various industries. This is caused by innovation and disruption. When one company innovates/disrupts so well and continues to execute it can become a de facto "monopoly," gaining near 100% market share.
When the industry and market are allowed to continue unabated[1] this 'monopoly' can eventually be broken if the company fails to innovate and leaves the industry vulnerable to upstart disruptors. The very possibility means even with 100% market share the company is not a true monopoly, and in practice the consumer benefits from the company's 'existential fear' which motivates it to continue to serve its customers in better and better ways.
[0] knowing the best way
[1] assuming the major player(s) doesn't lobby/enact regulations to protect its market/industry position
The data doesn’t support this though in the example I gave. This is why many cities like LA are switching to a single provider per area. Note, there still is competition. The contracts go through a bidding process and a competitor could try and develop more efficient processes in a different district of LA. It just doesn’t make sense to have five providers serving the same block in a residential area as it drives up the costs for everyone. For more rural areas, the issue becomes that the capex to support the landfill and truck buildout doesn’t typically support multiple competitors.
I suppose this isn’t much different than a development team trying to work in both Postgres and MySQL. Sure, maybe you hedged your bets and your team uses both to experiment which is better, but at some point, it likely is better to develop expertise and experience in one of them especially if it’s a small team.
Consumers benefit assuming all suppliers are equivalent, which is not at all the case with Amazon. They're gaining a price advantage over using real carriers mainly through incredibly exploitative labor practices in the warehouse and abusing uber-like contractors to cover the last mile for pennies on the dollar.
Not only is the human/societal cost high, consumers directly suffer as well as untrained contractors working irregular routes rush to meet unrealistic deadlines. Every day a different person in a rented van pulls up to throw armloads of packages at my building, may or may not be the right entrance, they don't know the place and have no time to check, before racing off to the next location.
If the model is failing as you describe, then more competition is a good thing. Consumers will flock to whoever that provides better service for what it is they’re willing to pay.
I’m not sure how consumers suffer - if trained or untrained contractors fail at their jobs, consumers take their business elsewhere.
It sounds like you’re against Amazons delivery practices. Fine. But the more competition there is, the better. UPS or Fedex absolutely shouldn’t own the private delivery market.
I think there is enough packages to be delivered that you would more likely have two trucks with full loads anyways. These companies aren't making any shipments with anything less than a full truck, I'm sure of it
But surely they would rather have one truck service a shorter route than have two trucks service the same longer route if it leads to the same overall utilization rate.
I feel delivery companies should bid for providing service for the last couple of kilometers, then the winner should get an exclusive contract for some time frame. That's how it's done for other services like regional rail public transport.
Why exclusive contract? What is gained? Rail right of way is exclusive just from geometry and there are various historical "accidents" involved in ownership from no longer relevant reasons but there are myraid ways to deliver mail which may or may not be excluding.
A forced bidding system seems to give gameability and artifical barriers to entry for little gain. To give an anchhacic example of the sort of problems it would be akin to requiring a business that can serve all of New York City competively before bidding. Having a mail room in the lobby of a large apartment would violate that due to serving only residents.
I was thinking of parcel deliveries. Narrowish European inner city streets are regularly blocked by delivery trucks and fundamentally it's unnecessarily many of them because there are so many different companies servicing the same street. Where I live double parking on bicycle lanes is extremely common (the individual delivery people often see no alternatives), which poses massive dangers to cyclists. Also these trucks typically are quite large, worsening all issues, because a full load is meant for a long route.
If there was just a single company responsible for some "last mile" area, smaller vehicles like this electric model [1] would suffice. They would distribute parcels from a depot that is filled by larger long distance trucks that do not need to belong to the same company.
The last point is important: If DHL, FedEx, UPS etc. each have their own final storage buildings and delivery fleet, those depots could not all be situated close enough to the target addresses.
Did I hit a nerve by picking public transport as an example? If it does not work out, regulations are bad. Competing non cooperating infrastructure service providers are a bad idea if they hinder each other.
Regional rail works okayish in Germany. A part of the regions and lines are carried by private business, others by the former monopolist that is still fully owned by the state.
The people that deliver in those amazon vans to my place are clowns. Next-day and two-day delivery is no longer reliable. It's making me not want to shop with amazon.
What is interesting is that an American company is copying Chinese companies after pulling out of China because they could not compete with the local companies.
Both JD & Taobao/Tmall have their own large shipping empires in China. I suspect that was part of the reason they pulled out. They could not compete using 3rd part shipping companies.
Now they are doing the same thing in their home market.
When did Amazon start logistics? I know for a fact that Taobao/TMall was doing it in 2012. There was a distribution hub at the end of my street. I assume they had been doing it a few years before then but not 100% sure when they started.
You are correct JD didn't exist back then since it used to be called 360buy and they used 3rd party shipping companies.
After becoming JD they started shipping themselves. Not sure about the year.
Probably right about JD but as far as I know Amazon didn't start doing logistics till after 2013.
JD has its deliver and warehouse and still use network of delivery companies and warehouse too. Tmall and Taobao use a network of delivery companies their own logistics arm Cainiao is not that big in warehousing and last mile delivery like SF Express or YTO.
In reality logistics is capital and labor intensive industry, Amazon will have trouble once the retail growth flatten but the cost structures are high. Amazon once unionized will have similar challenges and costs like UPS.
This is the reason FedEx never want to be unionized.
Taobao shouldn't have many warehouses because of the business model.
I'm not sure about TMall but I know that in Beijing they used to have a distribution point roughly every 10km through the whole city.
When you used to setup your address you selected the closet distribution center to you (I assume because the maps were not setup then. You don't select it any more.)
When I buy packages in Shanghai about half of them are delivered through a 3rd party and the rest are direct. It may just be my area though. I assume it depends where the product is come from...
USPS consistently rings my doorbell and makes sure packages are handed to me rather than left outside.
Amazon delivered packages have been: thrown from the street; arrive crushed, punctured, or otherwise damaged; left in the driveway; left in the neighbors yard; never ring the doorbell, unless it's after dark, and then they ring and run.
Amazon's last mile service is a complete shit show, impressively worse than the random cut rate last mile delivery services they used when they were trying to force UPS and FedEx to lower prices.