Over the past three decades, Amazon has grown into a household brand known around the world and is at the very top of the e-commerce industry. With its staggering growth, Amazon has been steadily expanding its efforts in growing its logistics operations across the United States in recent years. This move is to bring all such operations in-house and reduce their dependence on external contractors to deliver packages to their customers. As a result, over half of all Amazon packages are being delivered wholly by Amazon itself currently.
Amazon is delivering 2.5 billion packages a year, coming in behind FedEx at 3 billion and UPS at 4.7 billion respectively. Despite that rate, it is still an incredible growth from Amazon and is predicted to surpass the other two giants if the trend continues. This move shows Amazon’s desire for independence from other companies to transport their goods as previously they have paid companies such as FedEx and UPS tens of billions to do it for them. Now, Amazon has its cargo airline, known as Prime Air that was launched in 2016 – encompassing its drone network and steadily increasing fleet of cargo planes.
However, there is a cost in that as Amazon stated in October 2019 that they spent $9.6 billion over the previous three months in order fulfillment alone. Regardless of that, Amazon sees it as a worthwhile expenditure as it allows them to exert complete control over their entire delivery chain and allows for even greater efficiency in delivering products. With the growing demand and subscription for Amazon Prime’s express shipping, it wouldn’t take long for Amazon to eventually triumph in the logistics industry.