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Businesses Transportation United States

How Amazon's Shipping Empire Is Challenging UPS and FedEx (wsj.com) 89

Posted by msmash from the closer-look dept.
The e-commerce giant has blanketed the U.S. with warehouses and package-sorting centers, flooded the streets with vans and taken to the sky. From a report: Amazon's recent breakup with longtime shipping partner FedEx shows how far the e-commerce giant has come in creating its own delivery network. Over the years, Amazon has played down its ambitions. But as consumers flock to its site for everything from toilet paper to TVs, Amazon has quietly blanketed the nation with hundreds of sprawling suburban warehouses and neighborhood package-sorting centers, flooded the streets with tens of thousands of vans and even taken to the airways. The costly effort is enabling Amazon to control how goods reach its customers -- and increasingly turning it from a customer of delivery companies into a rival.

The 2013 holiday season was a turning point for Amazon, after orders overwhelmed carriers in the U.S. and led to late packages and upset customers. Since then, Amazon has multiplied the number of fulfillment, sorting and other delivery facilities from about 65 to roughly 400, according to an analysis of data from logistics consultant MWPVL; before 2005, it just had three fulfillment centers for the entire country, MWPVL said. Amazon has planted facilities near city centers across the country to be as close to each customer as possible. That has enabled Amazon to deliver more packages to doorsteps within a day and cater to demanding online shoppers. This year it started to shift the standard free two-day shipping option for its Prime members to one day.
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How Amazon's Shipping Empire Is Challenging UPS and FedEx

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  • UPS and FedEx suck (Score:5, Informative)

    by nospam007 ( 722110 ) * on Thursday September 05, 2019 @11:23AM (#59161682)

    If you search my subject above you'll get 2.310.000 hits.

    They are slow, their workers steal or ruin packages and rule number 1 is still true.

    "If you want something done right, you have to do it yourself."

    • Yep. This should be a wake-up call for FedEx to start taking their business seriously and acting like professionals.

      eg. No more "we called, you weren't home" lies to avoid refunds when you pay for guaranteed 48-hour shipping.

      No more completely squished boxes with laughable "parcel delivered in good condition" updates on their tracking system.

      etc., etc.

      Maybe it's selective memory but I feel most of my experiences with them have been negative. I can't think of a single one that arrived early or without some w

      • No more "we called, you weren't home" lies to avoid refunds when you pay for guaranteed 48-hour shipping.

        Like Amazon's "package delivered at 9:00 PM" (except it's not there, and then it appears sometime between midnight and 8:00 the next morning while I'm in bed) lie is any better.

        • No more "we called, you weren't home" lies to avoid refunds when you pay for guaranteed 48-hour shipping.

          Like Amazon's "package delivered at 9:00 PM" (except it's not there, and then it appears sometime between midnight and 8:00 the next morning while I'm in bed) lie is any better.

          At least it arrives! Typically if an Amazon package doesn't arrive by 6pm it won't for a week at least. I can't count how many times at about noon I've had Amazon notify me that my package is arriving that day, and then it doesn't show up for another week. I'd say less than 50% of Amazon packages arrive when they are "guarenteed" to arrive. Amazon's predictions are worse than 1980's weather predictions. Amazon would predict all hurricanes hitting Alabama if they did the weather.

          • Amazon would predict all hurricanes hitting Alabama if they did the weather.

            Does the name "Camille" mean anything to you? How about "Katrina"? "Ivan"? "Danny"?

            Those were just some of the hurricanes that hit Alabama, by the by....

            As to Amazon packages. Last thing I ordered from them was delivered by UPS, three weeks late....

        • I've had a few "Package handed to resident" where they just left it on the driveway and never knocked. While I was home. Multiple "attempts to deliver" that did not occur, and they back down from that claim when I ask what time and note that I reviewed the security cameras and nobody attempted any delivery.

          I've been told my house was "a business address that was closed for the holiday" when there was no holiday.

          I've had 3 of my last 5 "guaranteed to be delivered tomorrow if ordered by ..." show up days late

    • Re:UPS and FedEx suck (Score:5, Interesting)

      by BeerFartMoron ( 624900 ) on Thursday September 05, 2019 @11:43AM (#59161768)

      "If you want something done right, you have to do it yourself."

      But Amazon's last mile model is not "doing it themselves", it's a Uber/Lyft style model where you, the private contractor, go into debt slavery to Amazon by leasing their branded vans [cbsnews.com]. You then get to underbid all your local "Amazon Flex" competition to win the right to deliver each package. There is no way to build quality last mile delivery with that model. You'll be lucky if the van slows below 50mph while the rooftop trebuchet launches you package at your porch.

      But it will make for some great Ring video.

      • Nobody is forcing those private contractors to work for Amazon.

        • Re:UPS and FedEx suck (Score:5, Insightful)

          by BeerFartMoron ( 624900 ) on Thursday September 05, 2019 @11:58AM (#59161848)
          Way to miss the point that Amazon is not "doing it themselves". No one is forcing anyone to join Amazon Flex. Amazon Flex will not build a quality last mile system that will out compete UPS/FexEx/DHL/etc. on quality of service. For that, you will need actual employees, not contractors. Amazon Flex can compete on cost, it will be cheap, so cheap, that it might actually damage UPS/FedEx/DHL/etc. and could end up being a major last mile player, but it will always suck in terms of quality.

          • In Canada, or at least my part of it, Amazon is using Intelcom Express for their own last mile delivery and I believe it's like Amazon Flex. The drivers are using their own vehicles for the deliveries. For the most part I've been getting a lot better service from them than I'm getting from FedEx, UPS, or Purolator and sometimes even Canada Post.

            My only real complaint with them is that you don't always get an email stating that there will be a delivery attempt in the next three hours and where you are in the

          • Re: (Score:1)

            by josh s ( 5835034 )
            I have firsthand experience of this for the first time in years with Amazon. My package was being handled by Amazon "logistics". I had the app open and was "next for delivery".. Watched the dot, went outside to save the driver a trip all the way to the door. I saw them point to the neighboring house, speak to a random passerby who told them the street number wasn't mine and they then drove away, flagging my door that opens to the outside as "inaccessible". I called Amazon "support", who had no idea whe

      • it's a Uber/Lyft style model where you, the private contractor, go into debt slavery to Amazon by leasing their branded vans [cbsnews.com].

        Forgive me here... but doesn't slavery imply you didn't have a choice? No one is forcing anyone to work for Amazon or lease a vehicle for them. That was their choice. They could have just as easily chose another line of work with less risk. They chose it because they thought they could make a good ROI.

      • go into debt slavery to Amazon by leasing their branded vans

        In my area, it's a stout Mexican woman driving her personal, unmarked, old white van. Delivery is guaranteed by "end of day" (which in the industry typically means anywhere between 5 and 9), and the package actually shows up sometime between 1 AM and sunrise. Often, the package is marked as "delivered" just before midnight, even though it isn't.

        And I've seen her do the deliveries - she hustles every time. Amazon simply gives their workers double what is actually achievable in the hours they're willing to

      • Re: (Score:1)

        by josh s ( 5835034 )
        Haha already saw one. Perplexed Amazon logistics driver standing on a porch with a package while someone grabs her van and drives away.
      • I've been impressed with the quality of service I get from the Amazon contractors. I guess it's a matter of where you live, as the service personnel will be from this pool. Same thing with Uber and such. Can anyone comment on what Uber is like, near the "ghetto"?

      • I don't disagree, but if you have a dumb-as-fuck work pool that cheerfully allow themselves to be exploited, how is that Amazon's fault? It's like the human version of free money laying on the ground.

    • I actually seem to have better luck via USPS. However it seems there is a lot of hate for the USPS which I am not sure where it comes from, at least from my experience.

      That said, UPS and FedEx, I never have seen stolen or lost packages, and a few damaged shipments, but those damaged shipments came from poorly packaged shipments anyways.

      I don't see how Amazon will do any better or worse then the others what it would do, is just cut costs for Amazon.

      • However it seems there is a lot of hate for the USPS

        Maybe USPS taking a decade to provide tracking on the level with UPS?

    • Re: (Score:1)

      by Nexion ( 1064 )

      If you search my subject above you'll get 2.310.000 hits.

      They are slow, their workers steal or ruin packages and rule number 1 is still true.

      "If you want something done right, you have to do it yourself."

      I've had to stop using Amazon as it was about a 50/50 they would deliver my package to the wrong doorstep and then have the audacity to ask me to go look for it in my neighborhood when I called to complain. Strangely I've not had many issues with FedEx. UPS on the other hand beats the package up a bit now and again.

      • Strangely I've not had many issues with FedEx. UPS on the other hand beats the package up a bit now and again.

        I think it's regional. In my area, UPS always delivers on time and the packages arrive in good condition. UPS rocks for me. FedEx is frequently late and the packages look like they were used as props in a "Godzilla stomps on Tokyo" movie.

        • I don't know about UPS, but FedEx licenses their routes to contractors. Your FedEx driver is not actually a FedEx employee; s/he works for the local route contractor.

          Some of those contractors are incredible - I've had packages reliably delivered in a snowstorm. Others (especially in some larger urban areas) are absolute shit.

          But good luck convincing FedEx that their driver lied about making a delivery attempt while driving by at 50mph for your 8am delivery.

          "FedEx. When it absolutely, positively, must... g

    • If UPS and FedEx suck, then Amazon Logistics is a vacuum. My experience with them has been that more than 1/3 of the packages are either late, misdirected, ost (perhaps stolen before it made it to my house) and broken. Compared to them, UPS and FedEx are exceptional.

      • Re: (Score:2)

        by ranton ( 36917 )

        I didn't really start buying Amazon consistently until I moved out of apartments and into a house. I have never had a package stolen (out of hundreds of packages), but I was always uneasy about leaving packages at the entryway to my apartment complex.

        • Did you ever have a package go missing? If so, how can you tell if it was lost (in the system) or stolen? I haven't had any packages disappear once they were delivered to my home (based on security camera video), but plenty did not show up. I have even had Amazon Logistics claim that some things were delivered but never appeared. However, there was no video evidence of anyone attempting these deliveries. I can only assume it was either lost in the system, delivered to the wrong address, or stolen/dumpe

        • If you end up in this situation again - you can talk with your leasing office. Many places have one-way boxes where these things can stored.
      • Sadly, thieves seem to be multiplying these days. When possible I have Amazon deliver stuff to my PO Box or an Amazon Locker. It has worked pretty well.

        For a laugh, search YouTube for fake packages disgusted homeowners left outside their door for thieves to steal. Some packages disperse fowl smelling liquid into the thieve's cars; others make rattlesnake noises; others have GPS trackers to catch them.

    • Re: (Score:2)

      by EvilSS ( 557649 )

      "If you want something done right, you have to do it yourself."

      I see you haven't had the joys of getting most of your packages delivered by Amazon Logistics instead. From my experience, they are two orders of magnitude worse when it comes to missed delivery dates/lost packages/mis-delivered packages compared to UPS/USPS/Fedex.

    • their workers steal or ruin packages

      I recall reading a thread on some forum several years ago where a few guys form either UPS or FedEx were talking about what it was like to work there during the holiday seasons. I only vaguely remember the description that basically boxes came in on conveyor belts super fast.... that the practice was to essentially grab a box then just lob it to the other end of the truck. Even boxes marked "Fragile" were still nearly thrown. The only difference is that instead of just chucking it through the air... they'

  • ... at leaving packages in the bushes, or delivering to the wrong address. It's a crap shoot as to if I will ever receive anything I order these days. Almost as if they pay and treat their delivery monkies like crap.
    • Amazon delivery is the equivalent of Uber. I don't order much from them anymore, but I do get the packages.

      However I don't like that they use unmarked vehicles, seeing a different vehicle (sometimes looks like the driver's personal car) and driver every day, usually wearing glow in the dark safety outfits like they belong on the side of the road directing traffic. It all appears so unprofessional, but this is the race to the bottom so what can one expect?

      Amazon please, clearly mark your vehicles and h
    • I almost see homes, apartments, and buildings having to evolve to accommodate the influx of shipped goods. The mailbox is pretty useless anymore, nowadays people just get junk direct mailers, the occasional actual mail, and tons of packages.

    • Re: (Score:2)

      by Junta ( 36770 )

      Last time Amazon driver smoked like a freight train and the package contents stank of the smoke...

      Part of the Amazon equation for getting cheaper than FedEx/UPS is to do away with any semblance of quality control... The other part of the equation seems to be screwing over drivers uber/lyft style.

      • Actually.....

        Amazon is doing this the Uber way.. Hire independent contractors, pay them barely enough to survive without benefits and work them to death. Amazon contracts a bunch of folks who don't realize that cash flow isn't profit and even though they lose a few pennies per package try to make it up in volume. This is how Uber and their competitors do this.

        This isn't about quality control, this is about profit. So if they can contract with a bunch of people who don't understand business and get them to

    • ... at leaving packages in the bushes, or delivering to the wrong address. It's a crap shoot as to if I will ever receive anything I order these days. Almost as if they pay and treat their delivery monkies like crap.

      The driver's get $15/hour.

      • ... at leaving packages in the bushes, or delivering to the wrong address. It's a crap shoot as to if I will ever receive anything I order these days. Almost as if they pay and treat their delivery monkies like crap.

        The driver's get $15/hour.

        And extra apostrophe's.

        But they get $15 for the hours they're allowed to work. Then they work 4-6 extra, unpaid, hours a night to deliver all the packages they already marked as delivered to make their quota.

    • Re: (Score:2)

      by ranton ( 36917 )

      That certainly isn't my experience. I have received a few packages per week for nearly the last decade and I cannot remember ever having one delivered to the wrong address, left anywhere but my porch, or damaged enough that the contents themselves were damaged.

    • Packages in the bushes would be a step up. We had one drone that kept pitching packages into the muddy corner of the flower bed (just under the rain spout.) I have repeatedly complained to Amazon (and they claim that in our "file" they issued directions for the "delivery personnel" to place the packages on the porch). By the way, our porch is 2 feet to the left and 1 foot up from the usual landing site. Thankfully, I believe the pitching drone has either quit or no longer makes deliveries in our area.

  • I know shopping there is going to screw me long term. That eventually they'll have a defacto monopoly and will abuse it. But, well, inflation's about 2% higher than my pay raises (and I'm doing better than most, I actually get nominal pay raises).

    So every year my pay goes down a little. Cheap goods from Amazon help offset that. I can buy a pair of shoes for $60 instead of $120. I can buy tea in bulk for $5 instead of $10. It adds up, sometimes I can recover that 2% and keep my head above water that year

    • Re:Amazon is Walmart x 10 (Score:5, Insightful)

      by jellomizer ( 103300 ) on Thursday September 05, 2019 @11:53AM (#59161816)

      You are not going to save a lot with Amazon over other places. Amazons trick is that is is so big, that you forget to bargain shop. Heck going to the box store websites, and changing your location store, you can often find interesting deals.

      I once saved $100 off a powertool. because I found that Lowes had a sale at one store. And was cheaper there then other stores, or from Amazon.

      • You can save lots of money at Amazon. The trick is if you don't need it right away then wait for it to drop in price. I've been using https://camelcamelcamel.com/ [camelcamelcamel.com] to look at the price history of items and then set alerts for things that I want to buy at a price I want to. They make their money by getting a referral fee when you click the link they send you when the price goes below the value you set. I've saved thousands of dollars with them. For example, I just got a notice about a blade for my table saw.

      • Another example:

        Vital Proteins Collagen Peptides Unflavored

        Amazon [amazon.com]: 48oz, $1.79/oz, $86.00
        Costco [costco.com]: 24oz, $1.55/oz, $36.99

    • Re:Amazon is Walmart x 10 (Score:5, Informative)

      by mark-t ( 151149 ) <markt AT nerdflat DOT com> on Thursday September 05, 2019 @12:11PM (#59161898) Journal
      Ordinarily, a "nominal" pay increase is one that (at least) keeps up with the cost of living. If it does not keep up with the cost of living, then the so-called raises are effectively pay *cuts*, not meriting the term "raise", and therefore not nominal. What you appear to be describing about your pay raises is not what is ordinarily meant by a nominal increase, but rather a minimal one that is still adherent to a company policy which may likely be rendered obsolete by a different cost of living to one that existed when the policy was created.

  • I'm sure UPS and Fedex are worried about amazon's "lowest common denominator" delivery service.

    I'd rather have USPS handle my packages than amazon's fleet of moderately trained morons.

    • Most of the stuff I order that's fulfilled by amazon comes from the same place I think they have a warehouse/package sorting facility there then everything is delivered by USPS.

      In general USPS and UPS delivery people are paid much better than minimum wage so they are more likely to do a better job. It really depends on how those Amazon drivers are being compensated.

      As far as UPS goes if my normal route driver is working everything is great if he is off for some reason the people they get to fill in for him

    • UPS, USPS and FEDEX drivers have marked vans, uniforms with name tags,have to answer to managers and belong to labor unions. The others, not so much so.

      • I'll take consistent and successful delivery of packages over that other stuff ( particularly unions ).

        They could dress like they're homeless, as long as my shit gets where it needs to go when they say it will and it's in good shape I'd be happy.

  • It seems to take nearly a week for Amazon to get me a tracking number for an item I ordered and used the free shipping. That does not give me a whole lot of confidence in Amazon running their own shipping.

    • It seems to take nearly a week for Amazon to get me a tracking number for an item I ordered and used the free shipping. That does not give me a whole lot of confidence in Amazon running their own shipping.

      Amazon sandbags hard on non-Prime free shipping orders. They want you buying Prime. They really really want you buying Prime.

      • If you want decent shipping just go to ebay usually the same Amazon sellers have the same thing for less.

      • Amazon sandbags hard on non-Prime free shipping orders.

        It's funny because of the extent they will go to do this. I've had 3 or 4 times where I used the "Free 5-8 day shipping" and they would overnight ship the item to me 3AM the 8th day. Hell they did it on the 9th day one time.

  • Amazon contributions to OpenStreetMap (Score:5, Interesting)

    by felix9x ( 562120 ) on Thursday September 05, 2019 @11:49AM (#59161796) Homepage

    Amazon has been furiously contributing road and driving information to OpenStreetMap project. Mostly updates to unmapped roads and turn restrictions and other driving directions related changes. That is awesome way to both push their business strategy and give back to open source/data community at the same time.

    https://www.quora.com/Amazon-h... [quora.com]

    • Amazon has been furiously contributing road and driving information to OpenStreetMap project. Mostly updates to unmapped roads and turn restrictions and other driving directions related changes. That is awesome way to both push their business strategy and give back to open source/data community at the same time.

      https://www.quora.com/Amazon-h... [quora.com]

      Maybe that's why Amazon Prime is always late, they're mapping streets out instead of delivering my package. :(

      That said, good on 'em for contributing, it helps.

  • It wants me to pay exorbitant prices :(

    https://www.wsj.com/articles/h... [wsj.com]

    Since when were we not able to post anonymously?!?!?

  • Gig economy bubble (Score:5, Interesting)

    by ErichTheRed ( 39327 ) on Thursday September 05, 2019 @12:25PM (#59161972)

    The major reason Amazon can show these gains against traditional delivery services is because they're doing the Uber/Lyft model. Whenever there's an issue, they can just do a Pontias Pilate and wash their hands of any responsibility. I just saw an article in the NY Times this week detailing how one of Amazon's contractors caused a fatal road accident and because of this layer of indirection, Amazon won't face any sort of penalty or responsibility.

    We live in a university town, so a lot of our Amazon delivery drivers are college students. Last winter, I had to help one of these students remove an ancient panel van with 4 completely bald tires they got stuck at the bottom of our driveway. That's the thing that kind of sucks about this model...Amazon puts all the blame on the contractor, who is typically a broke college student or adult barely keeping their head above water by doing various gig economy jobs. Good luck getting anything out of the actual driver...and their insurance won't pay the second they find out they've been driving for Amazon or Uber under their individual coverage.

    Gig economy stuff may be a good way to pick up extra money once in a while, but it really does represent the last stage of big companies removing themselves from any sort of connection with their workers. For all its faults, I do like the paternalistic IBM/AT&T/GE model of the 50s through the 70s...if you gave effort for the company, the company would try to do right by you by not firing you at the drop of a hat, giving you training and promotional opportunities, etc. Even working in IT, I hate the fact that I'm expected to continuously train on my own time and money...this would never have happened in the old model.

    • The major reason Amazon can show these gains against traditional delivery services is because they're doing the Uber/Lyft model. Whenever there's an issue, they can just do a Pontias Pilate and wash their hands of any responsibility. I just saw an article in the NY Times this week detailing how one of Amazon's contractors caused a fatal road accident and because of this layer of indirection, Amazon won't face any sort of penalty or responsibility.

      We live in a university town, so a lot of our Amazon delivery drivers are college students. Last winter, I had to help one of these students remove an ancient panel van with 4 completely bald tires they got stuck at the bottom of our driveway. That's the thing that kind of sucks about this model...Amazon puts all the blame on the contractor, who is typically a broke college student or adult barely keeping their head above water by doing various gig economy jobs. Good luck getting anything out of the actual driver...and their insurance won't pay the second they find out they've been driving for Amazon or Uber under their individual coverage.

      Amazon's delivery model is to contract out the last mile to independent companies; which puts all the risks on them and not Amazon. Those gray Sprinter vans are owned by a separate company that Amazon contracts to handle delivery. That allows Amazon to control growth without any risk.

  • TFA is a week old.
  • it was yesterday 4 Sept 2019 in Norman Oklahoma on highway 9 just south of Oklahoma University, it was a big ford transit hightop, those vans sell for almost 30 grand new,
  • Delayed packed deliveries. Delivered to the wrong address. Delivered to the wrong distribution center - yes distribution center.

    Sorry Amazon but you packed delivery service sucks balls. Leave it to the experts. You won't save money and you will lose customers trying to undercut delivery costs while providing an inferior service in the process.

    Can't wait for your airline pilots to go on strike.
  • Since all the comments here are negative, I'd like to point out that cheap shipping is great. I can often buy things delivered to my door for the same price it would cost me just to ship them to somebody else. For example I bought a fender for my car that came in a coffin-sized box, which somehow was only $80 including shipping.

  • Yes, "Free Prime 2 Day Delivery" has a bit of variance - sometimes I order on Thursday and it arrives on Saturday. Sometimes "2 days" from Thursday means the next Tuesday. The vast majority of my packages arrive on the "guaranteed delivery date" though. Late deliveries are rare, and missing packages are even more rare. I average about 80 or so orders per year, and less than one per year gets lost. Never had any push back about refunds for lost packages either. Pretty much no questions asked.

    I've also

  • My last Amazon Prime order was given Free Same Day delivery.
    Of course they're tricky here. They tell you that Free Same Day is available, but both 1-Click and regular shopping cart defaulted to 1-day. You can't use 1-Click because you can't change it, and in the regular shopping cart you have to select it before confirming your order -- but it's there on selected items in selected cities.

  • Amazon shipment is not a challenge for the online sellers having dozens of virtual assistants to do so. All they care about their product listing on the top. How you can choose a profitable product which helps you rank higher on Amazon [urtasker.com]

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