Amazon entered Germany in 2015, and it is now its second-largest market. The push is part of the retail giant’s plan to build its own land, sea and air logistics operation to help contain shipping costs.
“If we have last-mile in our own hands, we can offer more services like same-day delivery,” said Bernd Gschaider, Germany director for Amazon Logistics.
Amazon’s expansion will pose a challenge to companies like Deutsche Post DHL, Hermes and DPD, which all see a large amount of revenue from Amazon packages.
Germany is in a special position in the industry because most delivery firms subcontract. Earlier this year, German police raids uncovered evidence that drivers were not being paid minimum wage or were deducting taxes incorrectly.
There is a law in the works that would make logistics companies liable for their contractors’ behavior. Gschaider said the new law won’t affect Amazon because it has strict policies in place regarding drivers and contractors, as well as spot checks to ensure regulation.
Currently, Amazon has four sorting centers and 13 distribution centers in Germany. Along with the new proposed distribution centers, the company wants to add two more sorting centers. Amazon is starting its driver search in Munich, and aims to bring on 200 of them. Experts say it’s could be difficult to find drivers because the economy is strong and unemployment is low.
“We want to support drivers delivering Amazon shipments better. Employing drivers ourselves will help us to better understand their needs and allow us to further improve the experience of all drivers,” Gschaider said.
Amazon said it will pay its drivers 12.80 euros ($14.16) per hour, which is higher than the minimum wage in Germany, while still under the typical DHL driver wage.