Move over UPS truck: Amazon delivery vans to hit the street

Ivan Schwartz
July 2, 2018

While they're probably safe in the short term, other delivery companies could be affected in the longer term as Amazon builds out its own comprehensive logistics operation, according to Sebastian. Startup costs can be as low as $10,000, Amazon said, with an entrepreneur running 40 trucks making $300,000 a year.

Dubbed "Delivery Service Partners", the program allows companies to run their own parcel delivery fleet with up to 40 vehicles and 100 employees and is geared specifically for small- to medium-sized businesses (SMBs), per Business Insider. In response, retailers are betting big on delivery services to drop off packages faster.

At a press conference in Seattle, Amazon unveiled one of the dark gray trucks with the Prime logo that businesses would hire to deliver parcels to the consumer, even saying how attractive conditions would be for businessmen to join plan.

Amazon announced today the launch of a new offering that helps entrepreneurs build their own companies delivering Amazon packages. Right now, FedEx, UPS and the U.S. Postal Service handle their deliveries, but Amazon says in a few years those services won't be able to keep up with the company's demand.

The ecommerce giant is seeking to assist hundreds of new small businesses to employ tens of thousands of delivery drivers across the U.S. by providing discounted vehicles, fuel, insurance, uniforms and access to "sophisticated delivery technology", the Seattle-based company said in a statement on Thursday.

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To apply, head to the Amazon Logistics website.

These businesses will be treated as Amazon's Delivery Service Partners and will receive support from the ecommerce major.

Amazon has been looking for ways to cut costs on the so-called last-mile of deliveries, which is often the most expensive part of the fulfillment process. And Amazon says it will continue to use other delivery companies, and that this program is just another way to meet the growing amount of packages it needs to ship.

It's unclear if Amazon will cut back on its postal deliveries in favour of its own and how quickly that could happen. With the new startup initiative, the online store will be able to boost its shipment capacity while putting Amazon-branded vehicles and uniforms on the streets.

"There are certain things that big, centralized companies do well but there are other things where local people know better, and last-mile delivery is one of them", said Paul Oyer, a professor of economics and entrepreneurship at Stanford University's Graduate School of Business.

Other reports by GizPress

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