Amazon Reportedly Testing Local Delivery from Merchant DCs

Once again raising the specter of cutting out more business to UPS and FedEx, Amazon is reportedly testing a program called Seller Flex that involves making local deliveries from the warehouses of retailers selling on its marketplace, according to a report from Bloomberg.

While UPS and FedEx may still handle these deliveries, Amazon will decide and not the seller, the report noted. The company has already been using local couriers for same-day deliveries in major markets, and has been leaning more heavily on the U.S. Postal Service, including on Sundays.

The report did not indicate how the deliveries would be handled and by what type of service. Amazon spokesperson Kelly Cheeseman said the company is “using the same carrier partners to offer this program that we’ve used for years, including UPS, the USPS and FedEx.”

The new program began testing in India and has now begun on the West coast, the news organization reported, with Amazon letting more merchants know in advance of a broader rollout.

By handling deliveries from seller’s warehouses, Amazon gains greater flexibility and control over the last mile, benefits from cost reduction through volume discounts and frees up space in its own fulfillment centers, Bloomberg reasoned. You can read the full story here.

MCM Musings: Over the past couple years the company has been aggressively building up its own delivery and logistics capabilities including leasing cargo jets and purchasing tractor trailers, creating a $1.5 billion air hub outside Cincinnati for its Prime Air fleet and investing in freight forwarding from Asia. Amazon and both major carriers have said repeatedly that these moves don’t affect their long-term partnerships, but the actions do speak volumes – and will undoubtedly affect volumes, including the busy holidays. Speaking of that, Amazon also held open houses this summer to recruit last-mile carriers in several major markets.

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