usa today

Amazon’sholidaynadircamein2013,whenshippingissuesmeantsome

packagesdidn’lidayason,thingsare

verydifferent.

Thecompanyhasmadechangessomeeassignsit'sbuildingoutan

Amazon-owneddeliverysystem.

Recently,Amazonpurchadafleetof"thousands"ofAmazonbrandedtrailers

thatwillmovegoodsbetweenitsover50fulfillmentcentersintheUnitedStates

toAmazon'ssortationcenters,locationswhereemployeessortpackagesbyzip

ilersmovingthefreightareownedbyAmazonbutthetrucksare

ownedanddrivenbyAmazon’scurrenttruckingpartners,saidspokeswoman

KellyCheeman.

That’spresumablysoAmazondoesn'thavetoregisteritlfasacommercial

truckingcompany,withtheregulatoryoversightandcoststhatwouldentail.

TherehavealsobeenrumorsthatAmazonmightbelookingintolaunchingits

eportshavesuggestedAmazonisconsidering

flightsoutofWilmingtonAirParkinWilmington,Ohio.

Askedaboutthepossibility,Cheemansaid:"We’velongutilizedaircapacity

throughavarietyofgreatpartnerstotransportpackagesandweexpectthatto

continue."

ForresteranalystSucharitaMulpurupredictedveralyearsagoAmazonwould

appears"theymaybegettingmoreactivewiththoefforts,"shesaid.

AmazonunveilsnewPrimeAirdroneprototypes

"'slikelyto

improvetheirdeliveryeconomics,theircapacityparticularlyduringpeaktimes

liketheholidaysandtheirtimingfordeliveries,"shesaid.

Amazonwatchersbelievethecompanywantsto“insource”moreofits

transportationandlogisticsasitreachesasizewhereitmakesmorefinancial

ntodoso,ratherthanpayingathirdpartytomoveanddeliverproducts.

JustasithaswithAmazonWebServices,Amazoncouldfirstbuildoutcapacity

foritlfandthenofferitforsaletoothers.

Amazoncouldendupeventuallyoffering"partsoftheirfulfillmentand

eventuallye

AmazoncargoplanesmovinggoodsfromNewYorktoSanFrancisco?Iwould

notbesurprid,"saidColinSebastian,&Co.

Sortation

EventhoughthenewAmazontrailersarenotactuallybringingproductsdirectly

tocustomers,they'revitaltoloweringcosts.

Inthepast,anitemmightbepackedatoneofAmazon'sfulfillmentcenters,

loadedontoaUPSorFedExtruckandthennttooneofthocarriers’own

hubstobesortedandthenshipped.

“ItcouldgoallthewayfromTracy,sville,get

sorted,”saidScotWingo,executivechairmanofChannelAdvisor,an

e-commercecompany.

Now,thopackagesaresorteddowntoZIPcodesatAmazon'sownsortation

centers.

TherevisionoriginallycameaboutwhenAmazonsigneduptheUnited

StatesPostalServiceforSundaydeliveries.“Butit’ndedupbeinganicewin,"

morebroadly,Wingosaid.

Lowershippingcosts

Financially,Amazonneedstogetahandleonshippingcosts,saidColinGillis,

technologyanalystwithBGCPartners.

Amazonisontracktoexceedthe$8.7billionitspentlastyearon

ostsarepartiallyofftbyrevenue,whichisabout$4billion.

Thatmeansthecompanyhasspentmorethantwicewhatit’arnedfrom

llinggoodsthathavetobeshipped,Gillissaid.

Overall,shippingcostsforAmazonare6.6%ofnetproductsales,whichisthe

saleofactualphysicalproductsthathavetobemovedfromawarehoutoa

customer’berdoesn'tincludesalesfromstreamingaudioand

videoanditswebrvicesdivision,saidGillis.

Evenfromapurelycustomersatisfactionperspective,havingtotalcontrolofthe

processmakesnforAmazon,hesaid.

“Whenmypackagearriveslatebecautheshippingcompanydidn’tgetitto

me,whodoIblame?IblameAmazon!”Gillissaid.

Majormetroareas

Amazonislikelytopickoffrouteswhereitsbestcustomerscluster,leavingthe

lessdenonestoothers,sayanalysts.

That'spossiblebecauAmazonhaxtremelyrichdataaboutwhoits

customersare,panymight

lookatareasinNewYork,SanFrancisco,SeattleandLosAngelesandpickoff

ZIPcodeswherelargenumbersofitsPrimeMembersshopfrequently.

Themathonwhichrouteswouldmakentodowouldn’

AmazonCEOJeffBezosfamouslysaid,“Yourmarginismyopportunity.”

USATODAY

InsideoneofAmazon'srobot-drivenfulfillmentcentersonCyber

Monday

TheeffortsareboundtospreadasAmazonbuildsupitsdelivery

alcoverageoftheUnitedStatesisn’tlikely.

“Willtheyeverdoitall?recertainlyroutesinthemiddleofa

cornfieldinIowathataren’tprofitableforanyone,"saidWingo."Ican’timagine

tesinthetop20metroareas?Sure.”