Key part is "for non-Amazon packages". I didn't even know this was a thing. They are having a hard time keeping up just with in-house demand, so this is likely the right move.
The economics of delivery services are fascinating. Density is king.
Let's say Big Delivery Company pays Joe and Bill to deliver 200 packages each, splitting a region of the city between them. They drive and deliver for 10 hours each, probably covering 50-100km each on the road- drive to the next stop, drop package off, repeat.
But now let's say BDC adds 200 pickups of packages as well in the same region, and also adds Kate as a driver, splitting the region 3 ways. Now, each driver still has 200 stops (some drop offs, some pickups), but the average distance between stops decreases since it's the same area overall region with more stops to make. That means each driver is driving less, taking less time, becoming more efficient.
As density of stops increases, variable cost decreases. Those pick ups are also additional business- tomorrow, density will be higher somewhere else. Given that, BDC could be doing those deliveries at cost, and still come out making money because of all the efficiency gains elsewhere.
And yes, this does make presumptions that pick ups are as easy as drop offs, etc, etc. Lots of those to go around. But the principle is the same: density is money, and any company doing deliveries wants more density.
>Amazon told shippers the service, known as Amazon Shipping, will be paused starting in June. It was available in just a handful of U.S. cities.
Under the program, Amazon drivers would pick up packages from businesses and deliver them to consumers, rather than ship orders from Amazon warehouses.
How does that work? So it is like Instacart but with Amazon picking it up and delivering it? I don't see how could that scale.
Edit: Incase this isn't clear, I have placed an order for 6 items in 6 different shops. If all these items were in Amazon Warehouse, they would have packaged together and shipped from One Destination. Just reading from the sentence it seems Amazon Shipping will have to go to 6 different places to pick up the package. It is the case that One to Many scale, many to many / one is difficult.
In the UK pretty much every courier offers a pickup service. You book it in, they give you a label to print, they turn up and take it. It's probably exactly like that. If you order from 6 shops, they ship 6 packages to you.
Some couriers (DPD? UPS?) in the UK take this a step further and will even come with the label ready to stick on the box.
Great if you don't have access to a printer.
I recall (perhaps incorrectly) that Royal Mail once offered a service where you could buy an "online stamp", then you would write a long string of letters and numbers above the address on the envelope to send it. It was distinct from freepost.
The Swiss Post currently has a stamp-by-SMS service for normal letters where upon sending an SMS to an automated system, you are charged the normal stamp price using the premium SMS system, and you receive a sequence (8-10 characters long IIRC) which you write where a stamp would normally go at the top-right of the envelope. It's far more convenient than having to remember to buy stamps in advance or typically going out of your way to a post office just to mail a letter as mail boxes, by contrast, exist seemingly all over the place.
If Amazon delivery drivers are moving around a city anyway then it isn't necessarily much additional work to pick up packages along the way as well as dropping them off. They presumably collaborate rather than having one driver do everything - so 6 different drivers pick up the items, bring them back to a central location, and from there it's just another standard Amazon delivery with 6 items in it.
It scales fine, it's just planned in reverse. Many-to-one is how trash pickup and other services are handled in the US. You have the same number of stops whether you deliver to, or pick up from.
I use an extension within Firefox called Bypass Paywalls. It seems to be able to avoid most of the (soft) paywalls by using a few tricks (deleting cookies, etc).
There is a joke saying that the local state owned post will surely quickly overtake Amazon at drone usage as the small "you were not at home, go at post office for the package" leaflets are much lighter than the actual packages, so each drone can easily distribute a lot of them. ;-)
Will drones as a delivery method to customers be viable within the foreseeable future? I just don't see how the economics work out. Even if you ignore all the unsolved software, logistical and legal (zoning) hurdles, seems to me like the ongoing security and maintenance costs of a drone fleet would be prohibitively expensive for a long time.
Some economists studied this[1] and found that even if you assume incredibly expensive drones and a rather small, spread-out city (Chattanooga TN), drones are signifacantly cheaper than delivery trucks. This is true even if delivery trucks cost $0 to purchase. Most of the cost of delivery is labor & maintenance, not upfront capital costs.
The main reason we don't have drones deliver things is because the FAA bans it. No state or municipality can override the FAA, so we're all stuck until the feds change the law.
I think this study jumps to many unsubstantiated conclusions in their estimates.
> We assume that operating costs for personnel, loading, and monitoring will be approximately the same per package for truck as for drone delivery.
but at least they included
> There are additional drone costs such as: setting-up and running the drone delivery stations, the investment in research and development, and lobbying the FAA. Other costs include: buildings and land associated with the drone stations, computers and monitoring software systems for drone flights, computer technicians and drone monitors on site, robotics engineers for maintenance and upgrades to drones on site, utility costs of running the building, logistics management team to oversee operations, potential insurance and legal fees associated with drones, and potential air and/or radio frequency rights for drones, etc. There is also the potential for legal costs in some of the following situations: drones are found operating in unauthorized airspace, drones are shot down by civilians, a drone lands in an unauthorized space, etc
There's also mention that the drones can only deliver up to 5lb packages.
That's a big reason why the hand-wavy stuff is nonsense. The limitless number of exceptions will add a ton of cost, and instead of grunts in trucks you'll need an army of analysts and developers.
For durable packages there's no technical reason the drone can't sling it between the roof and rail and it's not like delivery drivers don't routinely lob small packages not marked as fragile. Considering how fun to test that one would be I doubt the team responsible is gonna let that feature request ticket sit around collecting Jira dust for long.
Oh theres lots of things stopping a drone delivering a package to my porch, including but not limited to me, I dont want Amazon's drone blowing junk all over the place on my front porch, messing up door decorations, flower pots, whatever it is. Getting caught on a branch, a gust of wind blowing it into a column and causing property damage, my dog grabbing it (my dogs catch birds in the yard, they will certainly hunt this thing). I know the ideal scenario from drone delivery is magical but reality is had, same with autonomous vehicles.
A drone is way more loud than the various electric delivery vehicles used in Netherlands. Aside from how loud a drone/quad copter is, the noise is also high pitches (more annoying). Traffic is/can also regulated somewhat by limiting the hours that these can operate (at least in NL; though that's usually to businesses). Some of the delivery vehicles have an optimized design, minimizing the space they take (e.g. the ones used for an online supermarket called Picnic).
Aside from electric vehicles some companies (DHL, Coolblue) also use electric bikes.
What a joke of a paper. I could poke a million holes in their assumptions, not to mention their ridiculously simplistic and completely erroneous cost model. There is no way either of them have more than a breath's worth of experience in parcel logistics.
There’s an active drone delivery service operating in the New River Valley in southwest Virginia. It’s called Wing, and you can order baked goods and coffee today.
Zipline is doing it now for medical supplies (even for things like COVID-19-related PPE) every day and night in Rwanda, Ghanda, and expanding to India and the Philippines (with test operations in the US).
> They have been solving these problems operationally for years now.
Emergency medical supplies (the twitter mentions "Lifesaving deliveries by drone") is quite different than delivering packages. That you can get something up and running for lifesaving stuff is one thing. Doing the same for my 0.50 EUR AliExpress package is different though, I'm not going to be home. If it's lifesaving I'd imagine you need it asap and someone will ensure that they'll be waiting for the package.
Yes AMZN is currently working on building them, I know people who are working on the prototype hardware at one of their contractors. Expect the coronavirus pandemic to only update AMZN timeline. Both drones and cashier-less grocery stores will become a thing in the next 5-10 years. This means UPS/FEDEX/USPS don't have to pay workers, and more importantly have to pay much less benefits.
Unfortunately VCs were much less interested in funding R&D of rolling autonomous robots in the past few years, so they aren't going to happen all of a sudden when the world actually needs them.
I do agree though that they make a lot more sense than drones, for several reasons: (a) power consumption / mileage per charge (b) carrying capacity (c) safety in populated areas (d) privacy when flying by buildings (e) lack of suitable landing areas in urban centers (f) noise in residential areas.
Source: I am the co-founder of one and aware of internals of several others
Safety I wonder. If they are only carrying 5lb packages having them fall from the sky sound bad but the frequency of rolling robots causing car accidents or running over people or getting smashed by locals might make it more safe.
Car accidents typically involve a car running into a robot, which might obliterate the robot but would seldom cause injuries to the driver. Delivery robots would almost exclusively operate on sidewalks of 25 mph, maybe 35mph roads. Running into someone is also unlikely to cause serious injury if the robot is kept to a reasonable size and weight limit. Obstacle avoidance and bump sensors are trivial to implement. Drones, on the other hand, can take out eyes and cause severe injury if they impact someone in the face with spinning blades, and crash avoidance mid-air involves an advanced control loop as opposed to just cutting power to motors.
Well, I agree. The idea of a UAV with a 2m wingspan landing somewhere near my house to deliver a 5kg package sounds like it could cause a lot of injuries. The delivery vehicle has to be much larger than the package and it has to land near a spot that is accessible to humans so they can pick the package up. As soon as you have flying drones they will have to get near other humans. Ground robots have a huge advantage in that they are less dangerous to humans. Do you really think something that is designed to constantly cooperate with humans is going to fare worse than something that will be near one for a minute? It's very likely that the UAV companies don't test their landing programs sufficiently.
I expect the delivery fleet of the future to look like an Amazon Locker on a self-driving e-bike trailer frame. You get a ping when your package is on your block, and use your phone to open your locker.
If costs get low enough, it might be possible to do multiple delivery attempts per day. Something like "your delivery device will be on your block at 7:00, 9:00, 12:00, 3:00, 6:00 and 8:00".
Or, more optimally, you would configure delivery windows and tell it when someone will be available and they schedule one or two delivery times in that window.
Another factor could be weather conditions. Heavy rain/snow/wind could all affect range or even accuracy (heavy precip can interfere with GPS to some degree). Drones also probably work better in a suburban environ, but less in a dense urban area or less dense rural area. Also, maps can be terribly slow to update. My home is in a Chicago suburb, about 8 years old now. Google maps still cannot accurately plot my address. Personally, I dont look forward to "we dropped off your package where we think your address is" and yet the package is a few hundred yards away. I'm also reminded of one of my favorite fuckups, this by USPS: my Mom misquote "street" instead of "drive" on my address, street number, name, city, state and zip otherwise being correct, and the overnight package landed in Florida instead of Illinois...
Probably too loud and legal issues. Flying drones above trivial weights at low altitude is very illegal pretty much everywhere, in ways that are slow to change.
For good reason too. I'm sure there are many tens of thousands packages delivered in a decent sized city every day. With thousands of drones overhead the noise would be significant and even rare failures will occur regularly, crashing tens of kilos down on houses and people.
Maybe in a civilized place where there is density and people aren’t wont to commit senseless vandalism. Singapore, urban Finland.
Also it would seem it’s not an energy efficient way to deliver goods to people, but who knows. Paradoxically it would make sense for high value/low mass items like medicines (or narcotics too), but that would make them a more enticing target.
Delivering tacos or sushi on the other hand... maybe years hence.
They're not efficient ways to deliver to consumers, but to delivery units like the local post office they're remarkably efficient (especially for rural areas). The biggest cost savings to be had would be to deliver from a local warehouse to the nearby DU, where you would pay the last mile carrier to do the heavy lifting. The issue you run into is that there's no appetite for increasing the load at these units, so no appetite for innovation until the infrastructure improves.
I’ve always felt round things like sushi and burritos could be delivered by putting them into some kind of silicone fairing and firing them from a pneumatic cannon aimed by a computer, no need for autonomous flying robots.
I personally think the problems that autonomous delivery suffers from are the same that regular human drivers suffer from. You need a dedicated locker for packages. If you can place it near parking lots then you can double or triple the efficiency of a driver. Just think of all the packages that couldn't be delivered because nobody was at home or simply the act of walking toward the door. That is a lot of wasted time.
You have any idea how difficult it is to fly drones in some automated fashion in an urban environment? That's an NP hard problem not solved until we have general AI.
Urban areas are already pretty well optimized by the traditional system. Urban population density makes good use of a delivery van's cargo capacity. Drone deliveries would make more sense in suburban or rural situations, where a drone can be more efficient than a whole delivery van traveling somewhere to deliver a single package.
Self driving cars are a much more difficult proposition and we can already do that pretty well. Flying where there is significantly less traffic and less obstacles and a third dimension to use? That makes things very easy.
Piloting the drones isn't the problem- the problem is logistics, noise, regulation, costs, etc.
> This is just to deal with the current surge. They'll be back, with drones.
But they're not stopping the program until June, by which time the shipping will likely have slowed dramatically. Maybe they're announcing it now to appease FedEx and UPS when they desperately need their help, and can just renege later.
I'm not sure if you are joking or not, but toilet paper is in no way an 'essential' delivery. Any company that would think so gets a fail in logistics....
Not true by any stretch of the imagination. For one, Fedex has the 5th largest air fleet of any company in the world and they are the only freight operator in the top 10. They also have the highest scheduled air freight-ton miles by a long shot. Their ground network is impressive as well. While far from perfect, I would be quite hesitant to call that a generation behind.
There's a perception that Amazon built their in-house delivery services, "sortation" hubs, airplanes etc. to compete with UPS/Fedex... the reality is that it had to be done to handle the shipping volume. Amazon will continue to saturate all available capacity. Cannibalizing this service's capacity for internal usage is further evidence of that.
I think overall this is good news for Amazon. I know I am personally condering not renewing Prime due to constant delays on just about anything. If it improves the situation, I might reconsider
Yeah I just cancelled prime. There is no value proposition anymore- competitors have faster shipping, competitive pricing, and don't require membership
I have good contacts within FedEx, and as I understand it the general consensus there is that while losing the Amazon contract hurt, UPS is doing it so cheaply there's no way they're even close to breaking even on it. What's more, it's a substantial part of their network volume - so when Amazon pulls their business to go it alone, UPS is going to end up cash poor and having to deal with aging infrastructure and inflated costs from overcapacity.
> UPS is doing it so cheaply there's no way they're even close to breaking even on it
That doesn't make sense to me... why would UPS sign a contract with Amazon that it wouldn't make money on?
I can see accepting a relatively low profit, but not negative. Even as some kind of strategic defensive move. There's no winning scenario for them to lose money on delivering packages for Amazon.
FedEx and UPS live and die by volume. The more packages they move in total, the cheaper it is to move each individual package. They can then make their profit in sales to companies and individuals with far less volume and pricing leverage than Amazon.
For the sake of argument, let’s say that Amazon makes up 50% of UPS’s business, and those packages are shipped by UPS at a 10% loss. If the other 50% of their business averages a 20% profit, then they’re averaging a 10% profit across the board.
Without the Amazon packages, let’s say UPS can cut their operating costs by 25%. Now they’re shipping 50% as many packages, though, so the per-package operating cost has increased by about ~33%. Those customers that were generating 20% profit when the network was larger are now a losing proposition. UPS then faces the choice of downsizing their operation or raising prices. Both of those options are about equally bad when you consider that their competitors are not impacted by the loss of Amazon’s business (well, to be totally correct, their competitors have already absorbed the disruption to their operations when Amazon pulled their business to move it to UPS in the first place).
To be clear, I’m not saying the above numbers are correct - or even close to being representative. I’m merely illustrating why it makes sense for transportation companies to take large-volume customers even at a loss.
They've commited to ordering 100k electric vans from Rivian:
"Amazon CEO Jeff Bezos said the company has placed an order for 100,000 electric delivery vans from Michigan-based startup Rivian. The announcement came during an event on Thursday in Washington, DC where Bezos unveiled Amazon’s sweeping plan to tackle climate change."
I've rarely not had an issue with shipping from Amazon. Turns out when you randomly gig-hire a different person every day for delivery, they never learn how to get into an office/apartment building.
USPS/UPS/FedEx have been sending the same person for years. They know where the mail room is, what the building hours are, who to call for building access when codes rotate, where the elevators are, where the emergency stairs are when the elevators are down, and where the units are.
Half the time Amazon delivery just leaves the package somewhere in the lobby or not even in the building.
They're bad at last-mile, yeah. (All the providers seem to be, for one consumer-group or another.)
But if you can cut off the last mile, Amazon's "pick-up point" service beats UPS's or FedEx's hands down.
Amazon Lockers are 24hrs; never have line-ups; there's one outside every grocery store near me; and in a pinch, my own post office can be used as one, too. (Though I don't do that, because my post office is not 24hrs, and because there's a Locker directly on the way between my home and my office.)
FedEx and UPS, meanwhile, both bounce my packages to a warehouse at the airport (40 minutes away) or in a neighbouring exurb (50 minutes away), and only after first attempting to deliver them to my house (which will never work), with no option to send them straight to the pick-up location. (Yes, I can get the packages redirected from the airport warehouse to a pick-up location once they're already at the airport warehouse, but that means an extra two days of waiting for my package, and then I have to go to a pick-up point that's 20 minutes away from me anyway. I may as well go to the airport!)
I live in an apartment building with a flaky buzzer entry system and no lobby mailroom. "Pick-up from a nearby location" is the only viable option for me. Amazon nails it. Everybody else is way behind.
Last time I used a locker for delivery, they tried to deliver twice when no lockers were available, broke the item on the second try and then gave a refund instead. I think the experience varies.
You might look into UPS' My Choice, which allows you to set a permanent preferred delivery redirection. Alas it is not available for all shipments, e.g., signature required or a shipper can tell UPS not to allow redirection. There's a charge (per delivery) unless redirected to a UPS store/access-point/center or you are a premium (paying) member. FedEx Delivery Manager is similar.
Only a subset of the lockers are open 24 hours. I've had nice employees let me hang out after they lock the doors so I can wait for the delivery guy who is an hour late
Regarding UPS/FedEx I've found it varies based on where you live. I've had the same experience you describe before with long-time drivers. At my current residence it's the opposite, the drivers seem to switch out all the time. My door is hard to find so I notice when the driver changes.
Surprisingly Amazon has done the best in this situation because they incorporate a distinct step in their delivery protocol: the driver calls me if they can't find my door. I don't understand why FedEx and UPS can't do this.
As a driver I typically don't have your phone number. The times that it is on the package, I will call you if anything is out of the ordinary. I'll call you and then if that doesn't work I'll leave a voice mail and follow up with a text message in the hopes that you'll get back to me while I'm still in the area/before the re-attempts the next two delivery days. Most times I'll call another driver before I call the customer, because they'll likely have knowledge of the area. In my hub they try to keep the drivers on the same routes or, in the very least, on the same loops (groupings of routes). When you learn an area everything goes much more smoothly. In your case I would consider calling UPS and getting in contact with one of their Operations Management folks. What they can do is add a short note about the location of your door to the scanner, so that a driver who is not familiar with the area is able to find it. If you get ahold of one of the drivers they can also let the Operations workers to add that sort of note.
>I don't understand why FedEx and UPS can't do this.
Amazon can be reasonably certain that the consignee is also the person that ordered the package, and they have that person's phone number. FedEx and UPS do not have this luxury. I've called numbers for alcohol deliveries (Under no circumstances can I release the package to a neighbor or just leave it) and instead of the consignee I was put through to a winery out in California. Thankfully they got in touch with the customer and had them divert the shipment before I had to return to sender the package.
> In your case I would consider calling UPS and getting in contact with one of their Operations Management folks. What they can do is add a short note about the location of your door to the scanner, so that a driver who is not familiar with the area is able to find it. If you get ahold of one of the drivers they can also let the Operations workers to add that sort of note.
I've actually tried this! UPS operations management does apparently have the description of where my door is, because they can read it back to me when I call them, but the drivers don't seem to use it on the ground.
> As a driver I typically don't have your phone number.
This seems crazy to me! UPS and Fedex do have my phone number because I've registered for their delivery management programs. It boggles the mind that this isn't passed on to the driver.
Thanks for the inside baseball, it's fascinating to learn more about this process.
>because they can read it back to me when I call them, but the drivers don't seem to use it on the ground.
I guess the notes they can keep and the notes they put in the scanner are separate. Is the door a really really far walk or something? I can't imagine the drivers are just ignoring the note. I'm guessing that it's just not in the scanner. Really what I'd like to see is the ability for drivers to create/edit notes themselves, instead of having to rely on the operations folks to do it for them. Would be better to have all of the access codes in the scanner instead of a giant text message that we pass around
>Thanks for the inside baseball, it's fascinating to learn more about this process.
You're welcome! I still find it fascinating seeing how it all works. What happens in the hubs is basically a giant bucket sort with lots of conveyor belts and sweat
This is much worse an issue if you live in a super new apartment in the suburbs. UPS/FedEx drivers know location very well. Amazon delivery ends up in a totally different location, marking it as delivered. I dont know how Amazon makes money when 2 out of 5 deliveries to my address were being lost or mis-delivered ️
I live in a pretty well established suburb. The first year I moved to my house, I had zero problems with Amazon deliveries, usually from FedEx. Somewhere along the way, they switched to their own drivers, and I started getting deliveries for a guy with a somewhat similar name +10 streets away (like 44th St. instead of 54th St.).
Over the span of about six months, some stuff I got included an electric lawnmower left right in front of my door, motorcycle helmet, cooking appliances, and a foot massager. Every time I called, I begged Amazon to fix this. After the third delivery, I threw my hands up and stopped calling. I figure the recipient calling to complain about missing packages was more effective than me calling to ask them to stop sending me stuff. There were a couple of more deliveries after that before they got the hint.
If I had to guess, it's by having typically 6-figure salary delivery drivers replaced with near minimum wage gig workers.
But yes, I've also noticed when my package ends up in a completely different building on the other side of town because of missed cardinal direction on the address. Our office manager has working relationship with the office manager on the other side of town with an address similar to ours because of how often they have to trade wrongly delivered/addressed packages/mail.
Looking at Glassdoor and a couple other Google results, the median is closer to $50k than >$100k for Fedex and UPS, as well as USPS. Though the point stands that gig workers should save money, even if they mess up fairly often.
This probably explains why some people have a great experience and some people have a horrible experience. If you live an apartment with gated entry, you will have a bad time. If you live in a house with ample parking in front, it will go well.
It might depend on where you are. In a big building, that makes sense, since the driver probably stops by your building nearly every day. I've also had an overall great experience using UPS and FedEx at work, where it's a similar situation.
But, for home shipping, I've always lived in 2-3 flat apartment buildings, and Amazon's delivery service has been like a breath of fresh air. They always deliver to the correct location, they're usually conscientious about placing the package in an inconspicuous location if possible, and then you get a push notification on your phone. USPS does the same, but loses points for notifying us by ringing every single doorbell in the building and then walking away, typically during someone's baby's nap time.
UPS, for their part, will generally drop the package at the bottom of the steps, essentially right on the sidewalk. FedEx, not to be outdone, likes to leave it on the sidewalk in front of some random building a block down the street.
OTOH, I don't think i've ever had an amazon delivery person deliver one of my packages a couple houses down. That has happened to me a couple times with both UPS and fedex (although one must be specific with fedex when it comes to normal fedex or fedex ground).
The last time it happened it was a Christmas gift and I didn't even know about it until the person it was delivered to IM'ed my wife using one of the neighborhood contact services. Turns out the delivery company even knew they delivered it to the wrong address because they put "delivered to XYZ instead of ZYX" in the delivery notes.
For some reason the Amazon delivery people love to leave my neighbor's packages on my steps. Sometimes my package ends up at someone else's door. The one plus side of amazon delivery is that they take a photo of the package so I can roam my street trying to find the right house and then steal my own package.
I live on a street with a lot of townhouses, so there's lots of places with similar addresses (3334B vs 3330B) so I understand how it could happen. However, it's never been a problem with UPS, Fedex, or USPS.
Anyone. It was the seller’s decision, not the buyer. If it’s good enough for Amazon and you’re not selling something particularly special with exotic shipping needs due to extra fragility or handling precautions, why wouldn’t you use an option that Amazon felt was good enough for them if it cost you less?
This makes sense. My guess is that Amazon was lower prices by taking a loss on this service, trying to scale it up. They definitely have the cash necessary to sustain losses until they can drive down competition!
No idea what's going exactly, but something seems strange at Amazon right now.
- extremely long delivery times of up to 3 weeks
- Quite a fes out-of-stocks (only anecdata from the last wesks)
- Shutting out FBA inbound deliveries
- Major changes for Amazon Logistics
No idea what's going on exactly, but as an ex-Amazonian I am puzzled by all this. Sure, the situation is extreme and it hit right after peak 2019, when Amazon operations are in the usual post-peak down. But still, that cannot be the only reason. maybe inventories are all wrong as demand patterns changed, and Amazon is over stocked on not-needed stuff and short stuff in high demand. Or they have trouble ramoing up to peak-levels again without the normal preparation period. I don't know, but to me at least, it seems Amazon is less flexible than it was a couple of years ago. But maybe that's just me, so.
