Will Amazon Become a Logistics Giant or Just Another Parcel Customer?

It’s no secret that in the last few years, we have been increasingly aware of the influx of small parcels left at consumer’s front doors, 7 days a week. I mean, how many people remember packages delivered to your door on a Sunday? Not me.

Currently, Amazon pays USPS to deliver packages to its customers, not only by adding Sunday as a regular delivery day, but using them to supplement the already-burdened UPS and FedEx delivery networks.

An article recently published on Consumerist.com explores Amazon’s logistics practices and provided some very interesting insights…

If you live in a major metropolitan city, you might notice the increase of white Amazon delivery vans scooting around town. According to Amazon, this is their way of adding yet another guarantee that their customers are getting their packages on time, to make sure that should UPS, FedEx and USPS get overloaded, Amazon’s customers will not be the receiver of a late package.

This was never so evident the article states, than it was in December of 2013, relating to a large backlog of holiday packages at UPS and FedEx.  “The parcel carriers’ appeared to be unprepared for an onslaught of packages they received from Amazon.  Thee parcel carrier’s complaint was that Amazon dumped more deliveries than expected on them at distribution centers, leading to a costly backlog that disappointed gift recipients.”

Further evidence of Amazon’s commitment to their customer delivery promise is very evident in the UK, where Amazon says that the Royal Mail, (although disputed by the Royal Mail), does not have the capacity to deliver all of the packages that Amazon’s customers are ordering.  Amazon currently delivers about half of their customer orders in the UK themselves.

Back here in the US, however, it’s evident to me that at least for now, Amazon is simply supplementing the already loaded UPS, FedEx and USPS delivery systems because of its un-ending commitment to customer satisfaction. And, as a Chief Client Officer, I not only applaud this action, I fully support it.  The underlying question for the future however is this:  Will Amazon become a direct competitor of FedEx and UPS one day, or just another customer, or both for that matter?  Please let us know what you think.