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Started By
Message
Amazon Delivery Service, Surprisingly Effective, but is it Efficient?
Posted on 9/29/19 at 11:34 am
Posted on 9/29/19 at 11:34 am
A lifetime ago, I worked for one of the two biggest parcel delivery companies for over a decade. It was a pretty well oiled machine, although came with it's own mass of chaos that any delivery service has. But it's strength and weakness was the shear volume.
There was enough volume so that every route was pretty condensed, the driver knew that condensed area VERY well and it was very routine. This theme was reflected in the daily routine of the entire system. As volume would occasionally drop substantially (immediately after holidays), chaos would increase because of less routine. Efficiency really suffered when the volume was decreased. (More miles per delivery, drivers less aware of the area, laid off drivers, etc.)
When Amazon announced their local delivery service, and we saw them flailing near Christmas time it was no surprise. Tons of logistics AND new employees.
I'm more surprised at how well they're handling it now. (And happy I got my epoxy yesterday that I ordered Thursday.)
Something I can't answer for sure, is Is their delivery service operating efficiently enough to support themselves? They don't have the volume of UPS or FedEx, nor the history.
It will be interesting to see if this part of their business succeeds. Any insiders here that can tell us what it looks like from the inside?
There was enough volume so that every route was pretty condensed, the driver knew that condensed area VERY well and it was very routine. This theme was reflected in the daily routine of the entire system. As volume would occasionally drop substantially (immediately after holidays), chaos would increase because of less routine. Efficiency really suffered when the volume was decreased. (More miles per delivery, drivers less aware of the area, laid off drivers, etc.)
When Amazon announced their local delivery service, and we saw them flailing near Christmas time it was no surprise. Tons of logistics AND new employees.
I'm more surprised at how well they're handling it now. (And happy I got my epoxy yesterday that I ordered Thursday.)
Something I can't answer for sure, is Is their delivery service operating efficiently enough to support themselves? They don't have the volume of UPS or FedEx, nor the history.
It will be interesting to see if this part of their business succeeds. Any insiders here that can tell us what it looks like from the inside?
11
Posted on 9/29/19 at 11:38 am to Grassy1
Amazon is run by the richest man on the planet
I think they will be fine
I think they will be fine
Posted on 9/29/19 at 11:44 am to Grassy1
I'm more amazed at how quickly things are delivered when they had it off to the USPS or UPS. No Amazon delivery where I am and it still shows up in two days and occasionally next day if I order it early enough.
Posted on 9/29/19 at 11:46 am to Grassy1
quote:
Something I can't answer for sure, is Is their delivery service operating efficiently enough to support themselves? They don't have the volume of UPS or FedEx, nor the history.
I had talked to one of the drivers briefly.. they do have their own routes/areas just like UPS/FedEx etc. They also have an app that tells them what their next stop should be etc.
ETA: FedEx dropped amazon, not UPS. My bad. I think FedEx only did 2% of amazon deliveries any way. UPS share is more like 15-20% of their packages for 10% of the revenue
This post was edited on 9/29/19 at 11:55 am
Posted on 9/29/19 at 11:55 am to Puffoluffagus
GPS technology is certainly on the side of Amazon versus when I was in that business.
Sending rookie drivers out with a MetroKey and 10 packages was financial loss before they left the building.
Sending rookie drivers out with a MetroKey and 10 packages was financial loss before they left the building.
Posted on 9/29/19 at 11:57 am to Puffoluffagus
Posted on 9/29/19 at 11:58 am to Grassy1
this. It took years and years for UPS to have logistics down to a science.
Although, Orion was the dumbest thing ever.
Although, Orion was the dumbest thing ever.
Posted on 9/29/19 at 12:03 pm to pioneerbasketball
Orion is pretty bad
Posted on 9/29/19 at 12:05 pm to Charm299
Man, I don't even know what Orion is.
Posted on 9/29/19 at 12:09 pm to Puffoluffagus
Looking at the chart that Puff posted, it's pretty cool that Amazon has the ability to increase or decrease their volume at will by just diverting to and from UPS/USPS.
That's something that UPS/FedEx doesn't have the ability to do (that I'm aware of.)
That's a big advantage.
That's something that UPS/FedEx doesn't have the ability to do (that I'm aware of.)
That's a big advantage.
Posted on 9/29/19 at 12:31 pm to Grassy1
They waste a lot of money putting small shite in a huge box with but bubble packing filler.
Posted on 9/29/19 at 12:38 pm to Grassy1
I don’t know their end game but it doesn’t make sense for them to deliver every one of their packages. IMO, they will focus on larger metro areas.
This peak will be a real test for Amazon delivery.
They have a high turn over rate on delivery drivers, right now. Delivery stats have gotten worse since they started delivering their own stuff. I am sure they will figure it out.
This peak will be a real test for Amazon delivery.
They have a high turn over rate on delivery drivers, right now. Delivery stats have gotten worse since they started delivering their own stuff. I am sure they will figure it out.
Posted on 9/29/19 at 12:59 pm to Grassy1
quote:
Sending rookie drivers out with a MetroKey and 10 packages was financial loss before they left the building.
I read this and walked outside to look in a cabinet in my garage to make sure my 5 MetroKey’s were still there. Haven’t thought about those in years.
And I ordered a part for my wife’s food processor Monday and it showed up Thursday from Isreal. No shite.
Posted on 9/29/19 at 1:11 pm to Grassy1
Amazon e-commerce is a loss leader for AWS...
Posted on 9/29/19 at 1:13 pm to Grassy1
Amazon has the best logistics folks in the biz. The whole operation is highly efficient. It'll just take them a little time to develop and execute something that's never been done before. I'd say their biggest hurdles right now are scaling the distribution network fast enough to meet demand and continuing to develop the last mile (airport hub to door). It used to be a big deal for a company to open one distribution center a year...Amazon may open more than 20 in a year. Scaling is happening. The last mile is easy for big cities but harder for smaller more remote populations. I imagine they'll figure out how to get just about any product shipped one day, without a 3rd party, to all population areas 300,000k+ within the next couple of years. Probably utilize a 3rd party for remote areas for a while longer.
Posted on 9/29/19 at 1:14 pm to Puffoluffagus
FYI UPS is still delivering 10 times what amazon is doing.
Amazing is delivering a little over half of what FedEx does. As their volume increases they will become more efficient.
Their hub model is very different from those two delivery companies.
Amazing is delivering a little over half of what FedEx does. As their volume increases they will become more efficient.
Their hub model is very different from those two delivery companies.
Posted on 9/29/19 at 1:14 pm to jfturner212
quote:
It'll just take them a little time to develop and execute something that's never been done before.
It’s as if UPS, FedEx, DHL, and Airborne never existed.
Posted on 9/29/19 at 1:15 pm to DoUrden
quote:
They waste a lot of money putting small shite in a huge box with but bubble packing filler.
It’s a deliberate design choice: they have only certain box sizes on certain transport modes which are optimized for loading logistics.
That money lost in packing and potential space is gained back in corrugate supply chain simplicity and standardized pack configurations lowering load time.
Posted on 9/29/19 at 1:25 pm to Golfer
quote:
It’s as if UPS, FedEx, DHL, and Airborne never existed.
They've sold and delivered a product in a day?
Posted on 9/29/19 at 2:50 pm to Grassy1
The spread between the cost and profit at Fedex and UPS is what Amazon was after.
Let's say, once it is all amortized out, that Amazon as an entity will cut their delivery costs 10%, with the added bonus of improving delivery times and customer service.
Even if the savings ultimately turns out to be in the single digits, that's still a pretty big # for Amazon.
It was a logical move for them as it plays to their strengths.
They'll leave the low profit/no profit deliveries to USPS/UPS.
There's a lot more to it, but it was easy to see them making this move.
Let's say, once it is all amortized out, that Amazon as an entity will cut their delivery costs 10%, with the added bonus of improving delivery times and customer service.
Even if the savings ultimately turns out to be in the single digits, that's still a pretty big # for Amazon.
It was a logical move for them as it plays to their strengths.
They'll leave the low profit/no profit deliveries to USPS/UPS.
There's a lot more to it, but it was easy to see them making this move.
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