Amazon adding contracted vans to delivery network

Posted July 02, 2018

The company envisions hundreds of owners operating fleets of 20 to 40 vehicles and eventually having "tens of thousands of delivery drivers across the U.S.", Amazon trumpeted in its press release.

The partner companies can only deliver Amazon packages from the branded vans, but they're allowed to add their own non-Prime vehicles and pick up work for other companies. But Amazon says people in their Delivery Partners program could make profits of $300,000 each year.

The latest initiative is particularly important as more customers sign up for Prime Now, stoking demand for two-hour deliveries, said Colin Sebastian, an analyst with Robert W Baird & Co., in a note to clients. Amazon did not provide details about the incentives, nor did it explain whether it would pay for business per trip, per mile or per month.

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Amazon.com, which a year ago shipped more than 5 billion packages through its Prime program, is asking small business-owners to help deliver its goods. Contractors that participate in the program will be able to lease blue vans with the Amazon logo stamped on it, buy Amazon uniforms for drivers and get support from Amazon to grow their business.

Dave Clark, Amazon's senior vice-president of worldwide operations, said the new programme is not a response to President Donald Trump, who has insisted that Amazon should pay the United States Postal Service more for shipping its packages, but a way to make sure that the company can deliver its growing number of orders. Taking more control over that growth, the web retailer offered to help anyone who wants to start their own delivery businesses. Amazon is also setting aside $1 million to help military veterans interested in starting their own delivery businesses.

"I had prior experience running my own business but not in logistics", said Olaoluwa Abimbola, one of Amazon's beta participants in the new offering.

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The new business would be responsible for hiring staff, and Amazon would be the customer, paying for the deliveries. People have to apply at logistics.amazon.com and be approved by Amazon.

Using workers who are closely connected to Amazon and can represent it but who are not actual Amazon employees hits a sweet spot for the company.

What do you think about Amazon's new plan?

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