Delivery

Move Over, FedEx: Amazon Vaults Ahead In Delivery Race

Amazon Vaults Ahead In Delivery Race

Amazon’s epic push to deliver its own packages and cut out third parties like FedEx is picking up speed during the pandemic, with a dramatic year-over-year gain in July.

As of July, Amazon was shipping 66 percent of its own packages, up from 55 percent last July, according to CNBC’s Squawk Box, citing stats from ShipMatrix.

The world’s largest retailer has managed this feat even as the volume of packages ordered and shipped through Amazon has exploded amid the pandemic, with volume up 46 percent in July compared to the same period last year.

Moreover, Amazon delivered more than 34 percent of all packages in the United States in July, compared to 16 percent for UPS and 11 percent for FedEx, the CNBC program reported. The U.S. Postal Service remained at the top at 38 percent, though even that gap appears to be closing.

Overall, Amazon’s Delivery Service Partners initiative has grown explosively since its launch in 2018. Under the DSP program, Amazon increasingly relies on a network of small, independent delivery contractors in order to cut out the big, more expensive third-party carriers like FedEx.

In order to recruit drivers, Amazon has pitched the DSP program as a great way to launch a small business, pledging startup costs as low as $10,000 with the potential to eventually bring in hundreds of thousands a year for contractors who build fleets with as many as 20 to 40 delivery vans, according to CNBC.

In a blog post in July, the online retail and tech giant said it now has a network of more than 1,300 delivery partners in five countries, with 1.8 billion packages having been delivered around the world.

The initiative has also created 85,000 new jobs, according to Amazon. The company earlier this spring said it planned to retain the 125,000 new hires it had brought on to handle the avalanche of deliveries triggered by COVID-19.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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