Will Amazon’s delivery trucks permit competitive same day delivery?

An article in the Wall Street Journal (April 24,2014) titled “Amazon, in a Threat to UPS, tries its own deliveries”, describes a plan by Amazon in San Francisco, Los Angeles and New York, to operate its own Amazon logo delivery trucks for customer home delivery. It claims that control over the last mile by Amazon will prevent the delivery issues of the kind faced by UPS last Christmas, and provide competitive same day delivery. It also claims that shipping costs have been rising for Amazon. Will Amazon’s control over the last mile permit it to reduce costs over UPS and FedEx ? Will the need for dense delivery volumes to optimize costs require deliveries to be delayed until such routes are formed ? Will control over deliveries permit easier implementation of Amazon’s plans for anticipated shipments (described in an earlier blog) ?

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About aviyer2010

Professor
This entry was posted in Ecommerce, Operations Management, Supply Chain Issues and tagged , , , , , , , , , . Bookmark the permalink.

One Response to Will Amazon’s delivery trucks permit competitive same day delivery?

  1. It will be interesting to see how Amazon deals with the in-house logistics problems (managing worker unions, designing optimal routes, allocation of fleets, response to demands to maintain service levels etc.) arising from managing last mile delivery. Though it would be unfair to question Amazon’s capacity, but is it worth doing? Setting up a control tower for last mile transportation might suck up essential resources initially but can have possible long term benefits.

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