With the holidays a few months in the rearview mirror, you’re probably by now fully recovered from that last-minute rush of ordering gifts–the ones that were put off and the ones requested by teen children at the eleventh hour. Especially during the holiday season but truly throughout the whole year, Amazon 1-day and 2-day shipping has saved us all before. In fact, 1-day shipping is becoming a standard that consumers have come to expect on all e-commerce orders, especially since Amazon has made it free to Prime members. What does 1-day shipping really entail though? It can take mere hours to ship a package across the country. What goes on behind the scenes of this ambitious operation? This article will explore Amazon 1-day shipping logistics and the equipment that makes it possible.
Amazon’s investment in 1-day shipping
In 2019, CNBC ran a story on how 1-day shipping really works. In April of that year, Amazon doubled their standard delivery speed for prime members from 2-day to 1-day. This option is available on over 10 million products. Amazon spends billions on shipping costs every year, setting aside $800 million in the second quarter of 2019 to invest in normalizing 1-day shipping. Dave Clark, Amazon’s senior vice president of worldwide operations, explains that these costs mostly go to fortifying infrastructure and paying increasing transportation costs. The costs for e-commerce never end; there is a constant cycle of picking, packing, and shipping items. There is also a constant pressure to get it right. As one ShipBob article points out, a large percentage of shoppers say that their delivery options and overall delivery experience will determine whether they use particular retailers or services again in the future.
The name of the game is to get products from the creators to the consumers as quickly as possible with the fewest mistakes. Being able to offer free shipping, quick shipping, and accurate delivery worldwide comes with a hefty, Amazon-sized price tag and an extensive logistics network.
Where it all begins: fulfillment centers
While Amazon does sell items directly by using their own brands or items they purchased from a third party, most of the items you purchase on Amazon will be sold directly to you by a third party—Amazon is just the platform through which you can buy it. The items sold directly by Amazon are already sitting in Amazon warehouses. Many third-party items are also stored in Amazon warehouses while others are sent directly from the seller or are sent to an Amazon warehouse when you place your order and then rolled out from there. In order to increase its control over the process, Amazon is investing much more in generating its own logistics network rather than relying on UPS, the U.S. Postal System, or other shipping giants. As of 2019, Amazon directly handles shipping on 26% of orders.
The warehouses where inventory is originally stored are known as fulfillment centers. Amazon has 175 of these centers worldwide. These warehouses are where 250,000 employees “pick, pack, and ship” millions of items a year. To meet the mounting needs of Amazon 1-day shipping logistics, there are also 100,000 robots that help manage warehouse operations: driving robots for moving inventory throughout the warehouses which can be millions of square feet in size, and robotic arms for lifting packages or heavy pallets. Once your order comes in, the huge force of staff and technology at these centers will prepare your item for shipping after which the next phase in the process begins.
Shipping out
Amazon has developed an impressive fleet of internal shipping equipment: at least 50 airplanes, 300 semi-trucks (with 10,000 trailers operated by third-parties), 20,000 delivery vans, and ocean freight services operating between the U.S. and China. After being prepared at the fulfillment center, your package has to get to a regional warehouse near you. In an attempt to avoid outsourcing costs, Amazon sends packages long-distance in one of its 300 semi-trucks or in one of its own planes. Amazon 1-day shipping logistics have been transformed as Amazon has slowly built an air fleet over the years. They just spent $1.5 billion developing a new air hub at the Cincinnati/Northern Kentucky International Airport.
Amazon is in the process of becoming a full-fledged logistics company with the goal of taking over all shipping operations internally. This effort can be recognized in the rolling out of Amazon’s own branded commercial tractors. They have had their own branded trailers since 2015. These trailers have previously been transported by independent truckers or trucking companies. With a fleet of their own “day cabs”, these Amazon-owned semis will be able to make trips of up to 400 miles giving Amazon the option to disband with some other third-party partners. After the long-distance haul by road or air, it’s time for your package to go that last mile.
“Last-mile” delivery
In the world of e-commerce, there is one final, important process that needs to take place once your item arrives locally. Your item will be picked up from a regional warehouse by a delivery person and taken what is referred to as the “last-mile” to your door. Last-mile delivery is the most expensive part of the process. Business Insider reports that the last-mile portion accounts for 53% of all shipping costs. Before this, items are shipped in bulk but now each package requires hand delivery. This is a time consuming and labor-intensive process. For this reason, Amazon will often outsource to other carriers, as mentioned above. These services charge Amazon handsomely for last-mile shipping.
To combat these charges and also retain more control over Amazon 1-day shipping logistics, the company launched Amazon Flex in 2015. This service, known as a crowdsourced delivery strategy, operates sort of like Uber, but for package delivery. It draws on the “gig economy” that fuels companies like Uber and Lyft. Any ordinary person with reliable transportation, a valid driver’s license, and auto insurance can drive for Flex. Drivers can sign up for delivery blocks which are usually 3 to 6 hours. They show up to a local delivery station, pick up a dozen or so packages, and then deliver them using a phone app to guide them. They can also deliver on Amazon Fresh orders (grocery pick-ups). It is unclear how many Flex drivers there currently are around the country.
Here are some other innovations Amazon has recently rolled out to help lower the costs on last-mile delivery, improve speed, and also increase sustainability.
Advancements in Amazon 1-day shipping logistics and delivery
To help shoulder the burden of last-mile delivery operations, Amazon’s Delivery Service Partner program helps employees to become entrepreneurs and start their own small package delivery services. Amazon claims that start-up costs can be as low as $10,000 and has made a special commitment to reimburse veterans who enter the program up to that amount. For all Partners, this low cost is achievable if the entrepreneurs take advantage of all Amazon’s associated deals which include deals on vehicle leases, insurance and more. This is where many of the 20,000 Amazon vans come into play. As Delivery Service Partners, these independent businesses are required to drive Amazon-branded vans and uniforms when delivering Amazon packages. Some of the program participants have been very successful with up to 60 delivery vans in their fleets. If you already own your own fleet of vehicles, you can also qualify for this program if your vehicles meet Amazon’s requirements.
Amazon is developing autonomous drones which can deliver packages weighing up to 5 pounds in under 30 minutes. This service is called Prime Air, not to be confused with their airplane delivery service Amazon Air. The drones are guided by GPS and contain “sense and avoid” technology that prevents run-ins with other things it shares the airspace with. One of their promotional videos boasts a drone that can fly up to 15 miles. In 2019, Amazon revealed its latest design for the drone at a tech conference in Las Vegas and claimed that they would begin to be in use for the masses soon, though a date was not released. At this conference, Amazon revealed the extensive machine learning features included with this drone so that it will be able to respond safely and independently to new situations.
Another recent innovation is Amazon’s sidewalk robot called “Scout”. The idea is that this autonomous rover can improve the last-mile process by being dispatched from a regional warehouse to travel by sidewalk for package delivery. This would improve costs and cut down on emissions from idling vehicles. However, as one Wired article points out, successfully pulling this off will be more difficult as having autonomous technology navigate sidewalks is very different than roads or airspace. There are no rules on sidewalks. Scout is also unable to navigate gates and currently requires a customer to be present to enter a security pin in order to get the package out of the robot. As of mid-2019, these bots have now been rolled out in Washington and California with human “Scout Ambassadors” accompanying them on deliveries to gauge public reaction and how the little rovers do in urban areas.
The final delivery innovation mandates that the next generation of Amazon delivery vans—all 100,000 of them—will be totally electric. It is anticipated that these new vans will be in service starting in 2021. The vans will optimize delivery efficiency by coming in 3 different sizes and battery options to meet the needs of various routes. The main motivation behind creating the electric vans was an effort to reduce negative environmental impact from Amazon related transportation. However, other considerations like safety and functionality were also taken into account for the new design. Drivers for Amazon were brought in to give feedback on the design iterations. Safety technology like lane keep assist and automated emergency braking will be included in the design along with eliminating the danger of distracted driving because drivers are having to look at devices for directions or address information: it will all be a part of the van’s central logistics system.
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