Amazon takes on FedEx and DHL with new network of independent couriers

US-based entrepreneurs can run their own local networks of up to 40 branded delivery vans, with drivers wearing company shirts and hats

Ben Chapman
Thursday 28 June 2018 10:56 BST
The branded vans can only be used for Amazon deliveries
The branded vans can only be used for Amazon deliveries

Amazon is looking to take on delivery giants like FedEx, UPS and DHL with a new “last-mile” delivery service made up of independent couriers.

The e-commerce giant’s latest business will let US-based entrepreneurs run their own local networks of up to 40 delivery vans branded with Prime logos.

Drivers will wear Amazon shirts and hats and the branded vans can only be used for Amazon deliveries, raising questions over how independent the entrepreneurs in the company’s network will be.

Entrepreneurs can start a business with as little as $10,000 (£7,642), the company said, although that does not include the cost of hiring drivers.

“A 40-vehicle fleet could earn as much as $300,000 a year in profits,” said Dave Clark, Amazon’s senior vice president of worldwide operations.

Mr Clark said he would expect to see operators with 20 to 40 vans employ 100 drivers.

It is not clear how operators will get paid, for example per delivery, per mile or per month.

The new unit is designed to tackle the problem of getting products the last mile to customers’ doors. Drivers for the service will start at one of the company’s 75 fulfilment centres across the US.

Algorithms will then work out how to most efficiently deliver packages, whether via the network of Amazon couriers or with partners such as FedEx.

"This is all about scaling cost-effectively,” said Mr Clarke, adding that the rapid growth of e-commerce was outpacing the growth of its key delivery service providers.

The company has previously recognised the risk presented by the fact that it relies on outside providers for deliveries.

“If we are unable to negotiate acceptable terms with these companies or they experience performance problems or other difficulties, it could negatively impact our operating results and customer experience,” the company said in a recent regulatory filing.

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