
Amazon’s Ambition to Compete Directly with UPS and FedEx - cosmoharrigan
http://www.wsj.com/articles/amazons-newest-ambitioncompeting-directly-with-ups-and-fedex-1474994758
======
phodo
I've been a prime member for a while, and ordering from amazon is part of our
regular routine for acquiring stuff. I've never had much of a problem, until
recently. And UPS was entirely to blame. They (UPS) forgot the AC on the dock,
and it ended up being delayed by a week. When it arrived, there were broken
parts in the box. Amazon took responsibility and sent me a new one (with a $50
cash back due to inconvenience). I had them file a complaint w UPS. The
replacement unit ended up being late as well... it was sent to the wrong
address and signed by the recipient. UPS left the package at the wrong
address! Amazon was very apologetic and told me they would escalate the
complaint to their shipping logistics dept. I could tell they were super
frustrated at the lack of control they had over UPS. So they sent me a _third_
AC unit. This one arrived, but there was water damage in the box. I, for one,
am for Amazon owning the full experience and removing UPS from the chain.

~~~
gt565k
I'd have to agree with you.

I've had 2 bad experiences with Amazon orders, and USPS was to blame for both.
They put the envelope/package in the wrong mailbox in the apartment complex I
live in and marked it as delivered. I've received other people's mail in the
past too...

Amazon's customer service has been exceptional, they send an overnight
replacement with UPS and required a signature.

Recently, Amazon opened a pickup location near where I live, and I've been
shipping more expensive items there. The pickup process takes less than 15
seconds. Literally, walk in, scan barcode, locker opens up, and I pickup my
package.

Can't wait for Amazon to own the entire vertical and optimize the living shit
out of it.

~~~
FireBeyond
Yeah, last week USPS delivered $1800 of SSDs to my house. Great. Except they
flagged it as "delivered, on front porch", two days prior, leading to much
consternation, shoulder shrugging and the like while I attempted to find them.

~~~
jayess
Same has happened to me twice, although I'm pretty sure the mailman is
scanning items as delivered in order to make a quota and then waiting until
the next day to deliver them.

~~~
jordanthoms
This. I'm pretty sure there is a huge problem with USPS workers fraudulently
scanning items as delivered (to meet Amazon's SLA) and then actually
delivering them a week later. I'm surprised Amazon hasn't done anything about
it yet.

~~~
lotharrr
Hm, now I want my order email to include a (nonce) barcode that I print out
and leave on my door, and the USPS worker has to scan _that_ before they can
claim anything was delivered.

~~~
dancing_shark
In general, USPS _does_ have the infrastructure to do this: Managed Service
Points are barcodes placed on mailboxes that can be scanned by the carrier, to
establish when he/she reaches certain checkpoints.

[https://about.usps.com/strategic-
planning/cs02/2f3.htm](https://about.usps.com/strategic-planning/cs02/2f3.htm)

It's a more modern version of the mechanical "watchclocks" installed in
buildings to ensure that guards make their appointed rounds.
[https://en.m.wikipedia.org/wiki/Guard_tour_patrol_system](https://en.m.wikipedia.org/wiki/Guard_tour_patrol_system)
[https://en.m.wikipedia.org/wiki/Watchclock](https://en.m.wikipedia.org/wiki/Watchclock)

I have no idea how regularly USPS examines or audits their MSP data.

------
hackermailman
Mailman and software developer here. Of course all these problems can be fixed
with a simple db that tells the delivery agent upon scanning any customer
specifics like no safe dropping, go to rear door, ect. Weird individual access
problems like gates or hidden doors could also be entered by agents to keep an
up to date personalized delivery schedule. Right now the process is a bunch of
cards that get lost and are outdated and take a lot of time to check for every
delivery.

Agents should be able to see a complete overview of delivery that day, in
order of route, and consistent metrics taken to better the service over time.
Staffing could get weekly info of inbound parcels for each route and determine
staff levels needed as compared to now which is just fly by seat of your
pants. Of course CanPost who I work for don't do any of this, don't talk to
any employees and make all these decisions far away from the people who have
to implement them. The routes they design are ridiculous and nobody follows
the official version. It seems trivial to solve since it's just a plaintext
database and updates, plus talking to the agents to average time values and
build efficient routes but for whatever reasons they don't even try. The DbaaS
startup I work for remotely is constantly asking me ways they can improve,
nobody at CPC has ever done so.

I was surprised when Amazon delivery appeared on the streets and they were run
just as poorly as us, assumed they would 'disrupt' delivery instead of carbon
copying an already bad service with UPS/Post/DHL ect.

~~~
DashRattlesnake
> Of course all these problems can be fixed with a simple db that tells the
> delivery agent upon scanning any customer specifics like no safe dropping,
> go to rear door, etc.

That's a feature that UPS My Choice and FedEx Delivery manager have had for a
long time. UPS even lets me permanently divert all deliveries to my address to
a nearby UPS store.

~~~
hackermailman
Anecdote, the UPS driver I see everyday claims all sorts of problems with
their hand helds giving incorrect info or seizing mid route. They are also all
working heavy overtime, min 12hrs a day to finish their routes here. That said
they are probably the best out of the usual big delivery companies but that's
not saying much since just in this thread they also have consistent problems.
Amazon likely hired managers from these companies so they just implemented a
carbon copy

~~~
icantdrive55
I noticed that too. They are being overworked. They are still relatively
happy, but I see their stress levels rising.

I know UPS has a few different modes of employment. Some guys supposedly lease
their vans, and are kinda self-employed. I'm not sure.

I see my UPS driver still delivering packages at midnight.

I have never had much of a problem with UPS. I just hope they arn't taking
advantage of their employees.

I have thought about making a better, smarter, bigger mailbox. A mailbox that
would be more secure. I don't want to give away details, but would what do you
guys think?

Say if you could buy a mailbox that would scan your mail, and alert you you
through an email? A larger mailbox you could lock remotely after recept of a
important delivery. Or, is it a bad idea?

I've never had a problem with shipping insurance, or a company replacing an
item that was stolen. I have never had a problem with stolen mail, but it's a
problem in certain areas. I'm just throwing it out there, is it a bad idea.

~~~
DashRattlesnake
> I have thought about making a better, smarter, bigger mailbox. A mailbox
> that would be more secure.

Like this?
[http://www.steelmailbox.com/html/dvault.html](http://www.steelmailbox.com/html/dvault.html)

> Say if you could buy a mailbox that would scan your mail, and alert you you
> through an email? A larger mailbox you could lock remotely after recept of a
> important delivery.

All that technology-stuff seems like extra complexity for little value. Why
lock it remotely when you could design it with a one-way door and regular key
lock and have it locked all the time? What use are the email
notifications/scans of the outside of the items if you can't do anything until
you're at home anyway? There might be a small amount of benefit to being
notified if the mailbox has items in it to retrieve, but I'm not sure if it's
enough to justify the cost and complexity of the feature.

~~~
Moru
Or Volvos trunk delivery box? :-)
[http://www.dailymail.co.uk/sciencetech/article-2566930/Now-y...](http://www.dailymail.co.uk/sciencetech/article-2566930/Now-
youll-never-miss-delivery-Volvo-tests-smart-car-delivery-men-access-
trunk.html)

------
Declanomous
Why would Amazon care if they damaged their reputation with Fedex and UPS?
They can just do what UPS and Fedex do when it is too expensive to deliver a
package somewhere -- turn it over to the USPS. Amazon is already using USPS to
deliver packages on Sundays, which is win-win-win. Amazon wins, USPS wins, and
the consumers win. Amazon's home delivery seems to work well where it's been
rolled out, and I don't see competitive barriers to rolling it out elsewhere.

I think the article fails to cover a lot of areas where Amazon will have a
competitive advantage over UPS and Fedex. First of all, Amazon will be
vertically integrated. They can control the packaging. They can control which
warehouses are used to store items. This could lead to better packing
efficiency in delivery vehicles, and could make automated loading of vehicles
easier. If you have a particular route that is usually 110% full or 40% full,
you could either move more items to that warehouse or take some away. Plus,
Amazon can incentivize cheaper shipping options dynamically. Will the marginal
cost of this order be incredibly high because you'll need a second truck for a
particular route? Discount one day shipping, or offer two day shipping to
their work instead.

On top of all that, Amazon doesn't have unionized employees. That's a huge
advantage when you are trying to reduce costs. Not only are their employees
wages probably less, but they also don't have contracts that reduce planning
ability, like fixed routes, etc.

(The above is my comment on this post yesterday, though the post failed to get
traction. I think it's probably still relevant 24 hours later)

~~~
mikeryan
_On top of all that, Amazon doesn 't have unionized employees. That's a huge
advantage when you are trying to reduce costs. Not only are their employees
wages probably less, but they also don't have contracts that reduce planning
ability, like fixed routes, etc._

There's no realistic way to reduce costs being non-union shop in what is
traditionally a unionized business. Either the shop will organize on its own
or you run the shop to union standards in an effort to stave off organization.

~~~
shambala
Wal-Mart? Hardly union standards, and never been able to successfully
organize.

~~~
sangnoir
Is Walmarts business "traditionally unionized"? You might have missed that
crucial prior in GPs statement.

Additionally, Walmart actively discourages unionization via propaganda during
training and outright threats. If Reddit is to be believed, closing an entire
outlet is not too big a price to stave off the specter of unionization.

~~~
ethbro
Between Walmart and Amazon, I'd rather have Amazon win, but at some point
we're going to optimize away all the on the ground jobs.

Less of a deal for cities, but some of the small towns I drive through for
work don't seem to have any other employment than
trades/Walmart/service/trucking/maybe "the local plant".

What kind of world are we creating for small towns when 2.5 of those disappear
in the next few decades?

~~~
ericd
Maybe there's not much of a world for small towns? Perhaps the only people who
will live outside of big cities at some point will be remote workers looking
to get away from so many people.

The Caves of Steel series sees all of terrestrial humanity living in huge
hives, for example, with only robots outside of those, doing all the farming
and mining.

~~~
sunshiney
I so hope not. I live on the edge of a very small town. We have fiber! We also
have clean air, clean water, no crime, a helping community, strong social
connections and no congested traffic. I work online. I fish in the evenings or
do other outdoor activities. In 30 minutes I can be at a university. I hail
from Los Angeles where all of my younger well-paid siblings have had health
issues or dealt with crime etc. Small towns have benefits that have vanished
in metro markets. I am calmer and enjoy life more here ..and am healthier.

~~~
ericd
Oh I totally sympathize, I'm thinking of moving to a smaller town. But as a
thought experiment, it doesn't seem inconceivable that economic activity will
continue to concentrate into the big cities, leaving mostly tourism and a
smattering of remote work for the smaller towns.

------
saosebastiao
Knowing nothing about this specific project, but knowing quite a bit about the
cultures of their Transportation, Operations, and Supply Chain orgs, I would:

1) Say this is not news but PR. Congrats to Carney.

2) Expect actual technology to lag behind the vision communicated by 3+ years
while the dev teams try to find remotely suitable heuristics for the NP-
SweetMotherOfGod problems that the executives think are just a matter of
throwing enough servers at. Several entire orgs will be eliminated or
repurposed while this happens.

3) Expect costs to be an order of magnitude higher than the competition for a
good 3-5 years due to really stupid and trivially fixable mistakes/inanities
that are obvious to anybody on the ground floor. These inanities will
eventually be addressed by some level 4 or level 5 analyst that will
eventually (but not today) get fired for pointing out the wrong person's
mistakes...or worse, endlessly moved around orgs with no advancement
potential.

4) Expect it to be rolled out to countless cities mindlessly by some executive
that thinks they can predict results for Kansas City based on actuals from New
York City. These program rollouts will eventually extremely costly and will be
neutered to mean nothing, delicately handling the PR hits as they come in,
while the program will still exist on the record. The programs will never be
shut down.

5) Expect it will eventually (5-10 years out) become cost-neutral, but never
profitable. Right as this happens, some other crazy idea will be announced,
pushing everybody back in the red.

Rinse and repeat.

------
dingaling
An interesting condition of the Amazon deal with Atlas, for 767 freighters:

 _but [Amazon] may cancel the CMI deal with just 180 days’ notice merely for
the sake of “convenience”, which can be implemented from January 1, 2018._

CMI is (air)crew, maintenance and insurance and they then combine that with a
dry-lease of the airframes from an Atlas subsidiary.

[http://theloadstar.co.uk/atlas-air-shareholders-approve-
amaz...](http://theloadstar.co.uk/atlas-air-shareholders-approve-amazon-deal-
despite-fears-pilots-ground-crew/)

So it looks as if 2017 will be the proving-year for Amazon to determine
whether they want to take the plunge into self-managed logistics, and they
have an escape clause if not.

~~~
cosmoharrigan
That is interesting. But the dry lease would survive cancellation of the CMI
agreement, right?

------
oliwarner
Amazon Logistics is awful locally in the UK. I mean it. Terrible.

I'm currently waiting for a package "guaranteed" before midday. I've had a
couple of emails since then, the last pushing it back to "before 9pm". It's
9.25 now.

They've delivered stuff to the wrong place. They've said they knocked and
nobody answered (I work from home, wife is on maternity).

And their vans are rentals.

All in all it feels unprofessional. It makes me questions not only the value
of Prime but Amazon as a whole. I've started shopping around a lot more.

~~~
massysett
Sounds like Lasership in the USA. Non-uniformed people driving the most beat-
up, random private vehicles possible, with a "LS" decal slapped on the side.
Seems Amazon doesn't want to pay for decent people. They don't even bother to
ring the bell when leaving a package on the porch.

That said, I'm not sure they are worse than USPS and UPS, both of whom have
left packages outside in the rain in the middle of the driveway without
ringing the bell.

~~~
Bedon292
I have to say, never had a problem with Lasership. They actually come up to my
door, ring the bell, and move on. Never lost a package or anything like I have
with FedEx / UPS. And the USPS stopped ringing my door bell a long time ago.
Just comes up drops it by the door and leaves. So they seem to be the best in
my area, despite them all driving around in their personal vehicles and no
uniforms.

------
WheelsAtLarge
This is nothing but a win for Amazon. They have themselves as customers plus
all the other online retailers. Also, they can better optimize to fit the
online business environment with the latest tech. UPS and fedex have to deal
with the old ways of doing shipping plus the unions. If they fail, at the very
least, they force the other delivery companies to be better competitors.

But ultimately this is a loss for the everyday worker. The loss of the unions
means the standard of living will fall for those that work in the delivery
business. Walmart has always been seen as the enemy because of their never
ending fight to lower prices which means lower salaries for their workers. I
think Amazon is done a good job in not only lowering workers pay but
destroying jobs. Why has Amazon escaped the same criticism? Not only that, but
they are admired by many as the future of doing business and in effect
employee treatment. What gives?

~~~
fthssht
It seems to me that Amazon gets a tremendous amount of bad press singing the
exact song you just sung. However, I think the analogy is more like Uber
drivers for package delivery. A union won't stop a job from becoming obsolete
due to technology and society isn't willing to stop the advance of technology.
Its probably more advisable to develop a plan to retrain then try to get in a
union as a taxi driver or package deliverer.

------
sanj
Amazon doesn't need to compete directly with UPS and Fedex to win. Instead,
I'd argue that they need to take over deliveries to easy deliveries (eg,
cities) and continue to outsource the harder deliveries.

I'd suggest that this would remove the profit-producing deliveries for
UPS/FedEx and leave them with those that they do at a loss.

It also explains the code name: "Consume the City"

~~~
martincmartin
The expected response from UPS and Fedex is "if you don't use us for the
cities, we'll refuse to take your harder deliveries. You need to be all or
nothing."

Or the equivalent: "we see the writing on the wall, so we're going to charge
you an arm and a leg for each harder delivery, to make the most money before
you handle those deliveries on your own too."

~~~
swalsh
all or nothing, or.... you know, just raise the price.

~~~
bduerst
Pretty much. This move decreases Amazon's buying power with them so they can
just raise rates accordingly.

------
tedunangst
They're pretty terrible at it. Whenever I get something shipped by amazon
courier, I know it's down to about 50% chance of delivery. "Package was handed
to a resident." Yeah, so where is it? "Ask a neighbor." Yeah, right, in a
building with 100 residents I'm going to go door to door asking about my
package. The "good" days are when they leave it on the sidewalk outside (in a
city!) and I notice it's there before anybody else does.

~~~
buro9
I've basically stopped using them because of this.

I would shop from Amazon again if I could choose to have something delivered
by Royal Mail as then I know it would get to my door.

Amazon did the whole "left with neighbour" thing... but my neighbours are drug
dealers and their clients come and go all the time... the packages never
turned up and I'm hardly going to go confront the neighbours about it.

I shopped there for convenience, to reduce hassle, and their delivery service
increased hassle.

~~~
yomly
This has been getting progressively worse for me. I suspect it is a known
problem at Amazon but I'm confident this is actually an "innovation" of the
delivery men. It wouldn't surprise me at all if they are gaming the system by
dumping a street or apartment's deliveries all with one resident. They're all
so stretched for time that they have to cut corners to meet their targets...

For Amazon they need to find a means of setting humane targets and then
finding a way to accurately measure performance of staff...

~~~
DashRattlesnake
> They're all so stretched for time that they have to cut corners to meet
> their targets...

> For Amazon they need to find a means of setting humane targets and then
> finding a way to accurately measure performance of staff...

Yeah, my suspicion is that this is the root cause of my troubles with them. I
live in an apartment building, but I have a street-accessible front door, so I
have a sign clearly saying to leave packages _with the apartment manager_ in
the office. Half the time they just dump the packages at my door anyway, the
other half of the time they just dump them at the office's street-accessible
door, because they got there when it was closed.

I don't know what's so hard about noting a delivery exception and attempting
again the next day. All the other carriers seem to be able to handle that. A
few of the drivers have called me for instructions, but it's kind of
pointless: the next day's driver is just going ignore all the instructions and
dump the package anyway.

It wouldn't be so bad if I could have all Amazon Delivery packages redirected
to one of their nearby drop boxes, like I do with UPS. The problem is if I set
things up to use an Amazon drop box, ALL my stuff will go there, not just the
Amazon delivery orders, and they don't support 2-day shipping. I still want
the USPS orders to go to my mailbox, since that's the most convenient option.

They really need to allow users to enter shipping preferences, since not all
carriers are the same for everyone. For me USPS and UPS are the best, Fedex
and Amazon Logistics are the worst.

~~~
tedunangst
Exactly. There's some amazon boxes not too far away, but less convenient than
next door. If I could know which service they'd use, I'd tell amazon to put it
in the box and have UPS bring it to me. But they don't make that information
available.

------
badgers
Amazon has been doing this for years now, and they'll never completely abandon
using the USPS, UPS or FedEx for the foreseeable future. Their line haul
network has always been solid, and they've been using other carriers to do the
most expensive portion of the package life cycle, the last mile delivery. The
article touched on the fact that they've been doing trials of deliveries in
large cities that have the package density to make it profitable. Amazon
certainly has volume to fill delivery trucks, and I expect them to continue
this trend by identifying profitable delivery routes. However I don't see them
competing with a nationwide network on the scale of UPS or FedEx anywhere in
the near future. Amazon will continue to be a customer alongside a competitor
of them.

------
paulcole
If you're having problems with the Amazon Couriers just chat with Amazon
support online. Explain the problems (give examples) and ask them to always
ship using a different service. There's definitely an account setting for this
that's not visible to the end user, because I went from 100% courier
deliveries (with many issues) to 0% courier deliveries.

~~~
DashRattlesnake
Can you give me more information on what you did to get that setting changed?
I emailed them yesterday asking them to stop sending me packages with Amazon
Logistics, and the rep denied that such a setting even existed and just sent
my feedback to their shipping department:

> I'm really sorry about the problems you've had with the last few shipments.
> Unfortunately, there is no way to request a specific shipper for your Amazon
> orders.

~~~
paulcole
I told them that the last 3 deliveries got screwed up because they wouldn't
leave items at my door. Said I was ready to cancel Prime because of it.

------
xutopia
Is anyone concerned with Amazon taking over too many things? It's already
killing smaller shops... I understand why but it's now trying to take over
content and all forms of shipping? I'm worried we'll have a single mega store
one day from which we buy all our things.

~~~
gigatexal
No, I don't have any qualms with this. I just want quality stuff at the
cheapest prices. Smaller shops will serve niches that Amazon doesn't.

~~~
jerf
"Smaller shops will serve niches that Amazon doesn't."

To be honest, my experience is rather the other way around... I expect Amazon
to have the stuff my local shops don't.

~~~
cgag
If I'm going to a brick and mortar store it's generally out of desperation and
quick need, knowing I'll be forced to buy low quality crap for bad prices.

~~~
freehunter
Walgreens or Walmart, yes. But there are plenty of tiny shops around town that
have handmade stuff or quality merchandise that you can't get on Amazon. I
know I wouldn't buy a solid-wood antique furniture set from Amazon, for
example.

------
sfRattan
Am I the only one bothered by the use of the term "sortation?"

I had a roommate in college from London who pointed out that Americans tend to
add "-ation" onto words where it isn't necessary or doesn't further elaborate
the meaning (e.g. _transportation_ where _transport_ is sufficient). I haven't
been able to un-notice our rather pointless addition of letters to nouns. What
is wrong with _Sort Center_ or _Sorting Center_?

I did, before writing this post, find "sortation" in some unabridged
dictionaries referring to a mechanized or automated sorting process, but the
word still just sounds off to me...

~~~
lightbyte
"Sort" and "Sortation" are different words, they are not interchangeable. The
"-ation" suffix not just a random suffix added on, it has a specific meaning -
"The action or process of doing something". So "sortation" means the process
of sorting.

~~~
asdfqwerutoe
Some would say "the process of sorting" is sorting.

~~~
hammock
And "the process of transporting" is transportation (or transport). The reason
"sort" can't easily replace "sortation" is because it's only one syllable. The
two meanings of "transport" are distinguished by pronunciation: TRANSport vs.
transPORT

------
koolba
More competition is a win for all of us (consumers).

Plus anything is better than the rag tag set of local shippers they use for
same/next day orders (or 2-day orders that were late getting out). I'm not
going to name and shame, but I've had bad experiences with all of the non-
majors (i.e. not UPS, FedEX, USPS) they use from coast to coast.

~~~
atestu
Amazon will go from using many competing companies to using their own shipping
service… maybe you have a different way of looking at it, but that's less
competition in my book.

~~~
arrosenberg
The locals will still exist (but many of them aren't good, as parent said. As
both a shipper and a recipient, I've had bad experiences with OnTrac for
example), but this will create another national/international carrier, which I
think is a plus for competition.

------
elchief
I don't see how Amazon can do it cheaper (cost-wise)/better than UPS or Fedex,
who have been optimizing for 50 years.

If they can't do it better/cheaper then the reason to do it is because UPS or
Fedex are rent-seeking, and doing it themselves would bring Amazon's cost
close to the actual cost of delivering

~~~
MBCook
UPS/Fedex have to pick up and go anywhere.

Amazon only has to move things between their warehouses and consumers. 99% of
pickups are at their warehouses. Hell if they use UPS/FedEx for returns then
it's 100%.

~~~
unit91
Exactly. And Amazon doesn't even have to reach _all_ of its customers. They
can target high density areas, and use traditional shippers to deliver the
rest.

------
daxfohl
I wonder if UPS and FedEx will ever want to run their business on top of
Amazon's platform even though it's a direct competitor now, like Netflix does.

~~~
bdcravens
As far as I know, Amazon has thus far done a good job of segregating AWS and
Amazon retail operations.

------
curiousDog
I was thinking they'd be competing with Uber, Lyft as well in the not too
distant future. They're building out a sizable network through Amazon local
and fresh (maybe I have a distorted view of this because I live in Seattle
though)

~~~
tracker1
I'm half surprised they didn't by Lyft for that purpose earlier on.

------
cosmoharrigan
"Amazon’s goal, these people say, is to one day haul and deliver packages for
itself as well as other retailers and consumers"

They could choose to offer parcel shipping services to any retailer as part of
the Amazon Marketplace Web Services API, just as they currently offer the
Multi-Channel Fulfillment API[1], which allows a retailer to fulfill orders
from any sales channel using the Fulfillment by Amazon network.

[1]
[http://docs.developer.amazonservices.com/en_US/fba_outbound/...](http://docs.developer.amazonservices.com/en_US/fba_outbound/index.html)

------
hakanensari
I suppose this way they could start learning when you're (likelier to be) home
and tweak delivery times to happen then. Just reading comments here, you can
anecdotally see there's a lot of inefficiency caused by courier attempting to
deliver when no one's home and/or leaving with a neighbour/on the porch/etc.
and things getting lost.

------
akhatri_aus
I think this is silly. Simply having that last mile communication with
USPS/Fedex solves the issue entirely.

E.g 'just left your parcel on the side of the porch, behind the tree, no one
was home'. Or requesting them to do that if you're not home. With the other
issues of wrong deliveries and the like Amazon is just as likely to get it
wrong.

------
sunshiney
I read this with interest as I live on the edge of a rural town where I am
building a business that spurs the use of tech and net in rural areas of my 3
state region. We have fiber access but lag in net commerce skills and tech
hubs. I was at the PO recently. Mail here is delivered direct to farms but
townies must go to the PO. I was told by the PO Master that any large volume
mailings would require the sender to drive some 25 miles to the next PO as she
could not handle themm She was annoyed that I had received 7 Amazon boxes.
They had filled up the small space in her office and I had to cone get them
immedistely. This caused me to begin thinking of the clash between growing
rural commerce and an unexpected pest..the Post Office! Amazon may provide a
partial solution but still pondering how to completely solve.

------
jxramos
If they go that route would anyone have any recourse to like antitrust suits?
Any precedent close to something growing all encompassing like this? I'm all
for them taking an end to end approach, its like with any third party
delegation where quality issues arise, you end up being stuck with the
reputation hit.

------
wvh
This might provide a good incentive to the postal infrastructure to improve
their prices and service offerings. In lots of European countries the postal
system is semi-privatised but still in a state of semi-monopoly. End-user
logistics as provided by companies like DHL, PostNord and UPS are trying to
get a foothold in the market, but at least here in Northern Europe we're still
far from having a free market situation with different delivery options and
competitive pricing. Sending packages – especially out of the country, like in
the case of Amazon returns – can be prohibitively expensive.

If large companies like Amazon would threaten or effectively start to handle
their own logistics, it just might force the market to open up a bit more.

~~~
generj
The problem with having too many package carriers is that the infrastructure
is so expensive it's almost a natural monopoly. It's really difficult to have
a multitude of companies in the market.

------
hourislate
I'm curious whether they could save a substantial amount of money by moving
Full Trailers instead of LTL or having UPS/FedEx do it. A full trailer can
cost them as much as $1200 from CA to TX where as UPS or FedEx would charge
much more. So by distributing between distribution centers they would probably
save some money. I also think having planes will greatly reduce the time it
takes to bring items from China. ATM it can take 10-14 days on the water via
container ship. They could probably load the equivalent of 2-3 40' Containers
in a plane and fly it to CA for the same price a cargo company would charge.

It's not necessary to replace UPS or FedEx, just the parts that cost Amazon
the most money and are easily replaceable.

------
Zigurd
I had a monitor that needed you be delivered on time for a project falsely
marked as an attempted delivery by ups. I was persistent and obtained the
phone number if the local ups depot. I called them and made it clear that I
knew they were bullshiting. The driver was sent out to make the delivery and,
thinking i wasn't home, threw the monitor on the ground, stomped it, and drop
kicked it onto my front steps. Yay for well designed packaging.

The real lesson here is that Amazon's SLA should have given them the
positioning data it takes to catch ups in a lie like this. I should not have
had to pursue it. Amazon should have been penalizing then by an amount that
stings AND having the driver out late.

------
wAllDueRespect
my guess is that UPS will eat their lunch. this is UPS's core business. they
prob weren't doing what Amazon needed them to do partially because they have
other customers and partially because Amazon likely wanted too much from them
based on what Amazon was willing to pay. Amazon will likely place onerous
requirements on sellers to squeeze pennies out of the shipping process. and
then, eventually, when more of commerce has converted to the mail-delivered
model, and UPS is making a profit, and Amazon realizes that they're throwing
good resources after bad in an experiment gone wrong, they'll get back to
focusing on selling stuff and out of the business of delivering stuff.

~~~
shambala
Just because it's UPS core business doesn't mean UPS is doing it right.
Merchandising was Sears' core business. Heck, the airlines' core business is
air transportation, and plenty of them have gone out of business/merged in the
last few years.

Also don't forget that UPS is a union ship, with _very_ expensive union
contracts. The UPS is the largest individual employer in the Teamsters Union.

[https://teamster.org/upsupsf-contract-updates/ups-
agreements...](https://teamster.org/upsupsf-contract-updates/ups-
agreements-2013-2018)

------
macjohnmcc
I've had delivery problems when Amazon itself was doing the delivery. My wife
and I were both home for the entire day (as usual) and we were expecting a
package. About 2pm I got an e-mail saying "there was no answer at the door"
and "no safe place to put the package". I was sitting 10 feet from the door.
As far as a safe place the entry way to our house is a fully covered 8 foot
deep area. The package was not exceptionally big. I called Amazon and said
frankly that the driver was lying. He finally sheepishly delivered the package
a few hours later. He ran up and dropped off the box then ran back to his car.

------
lettergram
Yeah... Amazon, the delivery service delivered some mason jars for me. They
literally dropped them and half were broken. I had a massive box of broken
glass.

By contrast I've never had an issue with FedEx or UPS (USPS is bad, and so is
onTrac).

------
tylerruby
Links to WSJ should be replaced with a link to Google with the query being the
title of the article. That way we can easily navigate to the article without
hitting paywall. I can't be the first one to mention this! :)

~~~
ihowlatthemoon
You aren't. That's why the "web" link below the title exists.

------
davidf18
I was at a conference in NYC and I was met an AWS person and yesterday I
mentioned to him that Amazon was a logistics company with the Amazon Robotics
subsidiary running their warehouses and leasing of airplanes for airfreight
and how it would compete with UPS.

I have had problems with Fedex delivering for Amazon and with Same Day Service
in Manhattan twice.

Amazon also has these pickup boxes in the local drug store -- they do think of
things.

A lot of the stores seem to run out of items in NYC and I'm hoping Amazon
would run the warehouses/logistics for these stores chains (e.g., CVS, Duane
Reed).

RE: USPS. I don't like it when they delivery last mile.

------
sobinator
While taking on this challenge will be something like building their own
private Appalachian Trail, ambitious in its own right, I'll be interested in
something more subtle that this article touched on, "upending the traditional
relationship between seller and sender."\--will we begin to see widespread
shipping arbitrage[1]?

[http://www.sidehustlenation.com/amazon-fba-clearance-
arbitra...](http://www.sidehustlenation.com/amazon-fba-clearance-arbitrage-
shopping/)

------
yakster
I have had some terrible luck with Amazon shipment lately. Keep in mind that
it goes both for their in-house shipments as well as UPS and Fedex. On one
item, it got to the absurd point of them telling me that they didn't know
where the item was. They had to overnight me another one. Of course, the
original one showed up 5 days later. Before they can compete on something new,
they need to iron out their current systems.

------
faragon
Logical move, in my opinion: it is easier to scale delivery at Amazon scale by
doing it by themselves in cities/areas with enough critical mass.

------
KennyCason
It's interesting that the CFO of FedEx claims this is unreasonable. Given that
Amazon has at least two major other products (AWS + The core store), it seems
that they could potentially operate their delivery/logistics operations at
cost and undercut UPS/FedEx. Given that delivery/logistics is UPS/FedEx is
their core business, they can't.

------
dmritard96
who is amazon's biggest competitor in the e-commerce space? its a little scary
that they seem to have a winner takes all effect and both create their own
products, get all data from products sold, invest in companies etc etc. I just
worry that they don't have adequare competition to keep them in check...

~~~
berntb
They are their own worst enemy. It is getting too hard to buy physical stuff
from Amazon and not getting fakes. :-(

Right now I have a new type of problem:

I have waited for a package (in Romania) for a month, which the German DHL
won't deliver. I have contacted the seller every week.

Amazon has some "must answer in 3 days" rule for sellers -- but seems to
accept auto answering emails as an answer! My claim was cancelled because the
sellers promised to deliver, now nothing happens when I complain.

(DHL has delivered to me before, worked great. And I work from home these
weeks.)

It is just ridiculous.

This seems to be some criminal that found a hole in the Amazon state machine
for orders/sellers/delivery/returns/cancels/etc: Send empty packages with bad
addresses and never deliver, after 3 months the sale times out.

The only problem is that every time this happens, Amazon lose an old customer.

~~~
berntb
The package arrived after I had to call the transport companies myself, sigh.

------
djyaz1200
I suspect their goal is to have enough logistics capability that they have
pricing leverage over traditional carriers.

------
losteverything
$1.50 is what USPS charges (but I can't find the redacted document) and that
IMO is quite a deal. They will use less humans.

Why would FedEx ups change when it makes a pile now. I recall hearing how
letters would never be sorted automatically.

It will take an outsider like Zon to get to the future.

~~~
cosmoharrigan
What document are you referring to?

~~~
losteverything
As I recall a labor agreement \ negotiation support document from the NALC or
APWU. But I'm old and probably lost it.

~~~
cosmoharrigan
If you happen to find it again, it would be interesting to look over it.

~~~
losteverything
K. It supported Usps side to (current situation) make temp positions at $16.85
no OT termed after 360 days because Zon contract pays "x" and if full union
labor would pay up to $43

------
generj
I'd be interested to see if any collusion between the duopoly occurs in the
next interval. All UPS and FedEx would have to do is put a cap on Amazon's
packages for the holiday season at the last second to hobble them.

------
dstainer
One area to keep an eye on with this is the Fulfillment By Amazon (FBA)
program. If they do indeed take on UPS/FedEx, the FBA program will now be able
to store, sell, fulfill and deliver your product without leaving Amazon.

------
rambos
I thought this was already a known thing?

------
cosmoharrigan
In addition to the program to run their own parcel shipping network, referred
to as "Consume the City", it also mentions an interesting experiment called "I
Have Space", which allows Amazon to utilize excess capacity in warehouses
owned by third parties. Note that Amazon has already launched "Seller
Fulfilled Prime" for third party sellers which meet certain metrics.

------
smilekzs
FYI: jd.com (used to be Chinese clone of Amazon) did the same a few years ago.

------
hiphopyo
Anybody else wishing they would set up shop in the Scandinavian countries so
poor people there could earn money off their affiliate program as well?

------
a_lifters_life
You're horrible at this Amazon stick with retail instead.

