Amazon Logistics should worry postal services and carriers

[TrueBlueTerrier]

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The news of a new Amazon Delivery Service Partner program will doubtless send shockwaves through the carrier industry as every parcel Amazon delivers is one less for them to handle. Here in the UK, Amazon Logistics is already the fourth (if not third) largest courier in the country, with only Royal Mail, Hermes and Yodel competing on volumes of parcels delivered.

Amazon have a relentless desire with their customer obsession mantra to deliver the best possible experience, and even now there are few carriers who delivery seven days a week on a regular basis – Royal Mail certainly doesn’t and that’s just not good enough for Amazon.

At some point, it’s likely that Amazon Logistics will reach a tipping point and just as they lease out server capacity through AWS and warehouse space through FBA, they’ll start to rent out Amazon Logistics to anyone requiring a courier service whether it’s for a product sold on Amazon or not.

In the UK, there are a number of third party downstream mail providers who supposedly compete with Royal Mail but still use Royal Mail to carry out final mile deliveries. That’s likely to remain the status quo over the next few years, but as Amazon ramp up watch for the marketplace to start competing head on with Royal Mail and UK Couriers for parcel business and for large letters. It makes sense for Amazon as if they have a van driving down every road in the country seven days a week then the more volume the better. And they’ll be looking for profitable volume and can pick and choose as they ramp up, unlike other couriers who build warehouses and often to fill capacity take volume which has little or no profit.

Amazon are playing a long term game with logistics and one day soon they will be the biggest courier in the country and many other countries around the world. The announcement of Amazon Delivery Service Partner program isn’t even just the start, it’s an announcement to the world that they’re ready to ramp up Amazon Logistics to the next level.