April 10, 2018

'Flex'-ing its Muscles 2

Amazon disrupting package delivery along with everything else.
The newest player in the parcel delivery space came to a lot of people’s attention, in a foreboding way, thanks to the country’s most recent bomb scare.

In the aftermath of the rash of bombs in packages left at addresses in Austin, Texas, calls flooded in to local law enforcement agencies in cities across the country, as well as to UPS offices. Strangers, wearing nondescript clothing and driving vehicles with no insignia, had dropped off boxes at the callers’ or a neighbor’s door, and often snapped a photo of the scene before leaving.

To the concerned citizens’ relief, they found out these were not copycat crimes, but deliveries from Amazon Flex, the online giant’s foray into disrupting “last mile” package delivery the way it has so many categories of business in this country and around the world. In a business model similar to Uber that we described in this space last year, drivers work as independent contractors with flexible schedules, primarily delivering Amazon Now packages as part of the company’s same-day delivery service.

The new buzzwords for e-commerce success are “closer, faster, and efficient,” and Amazon has moved aggressively to give themselves a more intrusive retail footprint around the country, after driving many bricks and mortar competitors out of business. Along with purchasing whole foods and gaining their locations’ back-store space for local distribution, Amazon is reported to be targeting “big box” stores left vacant by closures and bankruptcies, such as that freed up by the recent demise of Toys R Us.

Ironically, those massive retail outlets once known as “warehouse stores” or clubs may now indeed become warehouses for Amazon. Omnipresent as they are online, the company that made Jeff Bezos the richest man on the planet, with a net worth of $112 billion, is chasing Walmart in physical access to American shoppers. Walmart has about 4,700 store locations, with 95 percent of U.S. population within five miles of one of them.

Amazon is relentless in developing innovative technology to increase efficiency in its supply chain. That focus can and should ‘deliver’ a message to the rest of us.

Kirk Shearer
President & COO
(973) 726-2103

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