In another sign of its growing ambitions in logistics and delivery, Amazon is reportedly asking couriers for its Amazon Flex service to make standard parcel deliveries as well as household goods for Prime members, according to Reuters.
The news service said Amazon did acknowledge that drivers for Amazon Flex in Texas had already begun mixing in parcel deliveries with regular Prime Now orders. Amazon Flex, which allows couriers to sign up for delivery shifts via an app, is currently available in 14 cities including Seattle, Las Vegas, Phoenix and Dallas.
This move shows Amazon yet again challenging the status quo by seeking to own more of its delivery operations and cut down on shipping costs, which grew over 18% to $11.5 billion in 2015. The company insists it is not trying to muscle out carriers like UPS, FedEx and the U.S. Postal Service, but just addressing network limitations, especially during peak periods. UPS CEO David Abney in particular has stressed that its Amazon relationship remains strong.
The move continues the drumbeat of news about Amazon’s logistics and delivery strategy, including international shipping out of Asia, domestic air freight and the purchase of thousands of truck trailers. And of course, the ever-present drone program, although that’s likely years off.
They also serve a double purpose: Giving Amazon more control over its supply chain, while reducing its mounting shipping costs and helping it squeeze out more black ink each quarter. It has recently been showing more profit, but could of course do better if those costs were checked. Prime’s promise of free two-day delivery for its tens of millions of U.S. members is a main driver of the phenomenon.
So now it’s not just retailers but carriers as well that are keeping a closer eye on actions of the behemoth of Seattle.