Jeff Bezos’ Amazon.com went from selling books in the late 1990s to a multinational conglomerate with stakes in retail, robotics, entertainment, media and cloud services that reshaped the delivery world and has its competitors in the retail business scrambling for a piece of the e-commerce segment. Amazon’s admirable distribution chain, along with its strategic partnerships, acquisitions and commercial relations allowed them to be regarded by the public as the authority on delivery shipments worldwide.
Amazon’s massive $800 million US dollar investment in its distribution chain had only one purpose: Make same-day shipping a norm. This form of retail is rendered the “new normality.” And with the online retailer cutting down their reliance on the United States Postal Service and UPS as carriers, the company plans to invest even more in its multinational logistics network as it enters a new decade with modified consumer retail buying patterns and behaviors resulting from the global coronavirus lockdowns that had a public inside their homes browsing the web for goods and services.
Amazon’s Distribution Chain
With its quarter-million man workforce, hundreds of airplanes, a 100.000 robotic army, 300 semi-trucks, 20.000 delivery vans and a freight shipping route covering Mainland China and the United States of America, Amazon seems unstoppable, the company wants to rely on its partners for deliveries while also considering that they can handle that aspect of the business.
Amazon handles 26% of all online orders, relying on carriers to do the rest, an activity that is costly to the company, something they wish to change after the price hikes by the US mail service and other couriers. That’s why Amazon tries to innovate and has programs like Amazon Flex, where individuals can sign up and deliver packages for the company and receive proper compensation.
Third-party sales constitute over 58% of Amazon’s sales, the company charges retailers a fee for listing their goods in Amazon and it uses its behemoth distribution and logistics chain to move a product from point A to point B with efficacy.
Amazon’s Robotic Plan
With robotic automation handling many of Amazon’s processes in its complex distribution and logistics chain, together with Jeff Bezos’ knack for investing in technology, Amazon is well on its way to develop by 2025 a massive automation plan. The retailer plans to retrain 100.000 of its quarter-million workforce for other jobs within the company, investing $700 million US dollars as it unrolls drones, robotic arms and other automated processes to expedite shipping.
Logistics and delivery experts working for Amazon currently develop patents, design robots and carry out test deliveries using drones. The project, implemented in California, and other parts of the United States plans to have a drone fleet deliver less than 5-pound packages within a 15-mile radius in 30 minutes or less. An ambitious project that, if successful will reshape Amazon’s relationship with its last-mile carriers, the crucial, and most expensive part of its expanding logistics and delivery chain.