July 10th was Amazon Prime Day and the company reported one-day sales broke every record Amazon has ever posted, even exceeding 2016’s Black Friday and Cyber Monday results. Prime Day this year lasted 30 hours, vs. 24 in 2016, which skewed the numbers slightly, but total sales were still up more than 60 percent. Amazon Prime members across 13 countries purchased more than 50 percent more in 2017 than they did last year—that’s a lot of packages that need to be shipped, free.
Free is a problem for Amazon but marks a potential boon for smaller trucking outfits. All that additional package volume costs Amazon a lot of money to ship to Prime members—$1.1 billion annually, according to estimates by Citigroup analysts. Clearly, it’s in Amazon’s best interests to build out its own logistics operation.
As the saying goes, “Rome wasn’t built in a day,” which is a particularly apt adage for creating an in-house delivery service for an operation as big as Amazon’s, but they’re already pulling together the pieces. Amazon recently announced it had purchased thousands of truck trailers and said it would begin lining up third party contractors to ship packages between fulfillment and distribution centers. This would augment efforts already underway with FedEx and UPS. And, as more people sign up for the popular Prime service, the number of free packages that’ll need delivery will naturally rise, creating a virtuous circle for logistics providers.
But what connects the moving parts of the Amazon logistics operation of the near future, and how do vehicle tracking systems fit into the equation? Logistics and hauling have been evolving for some time. Technology has created efficiencies in pickup and deliveries, created additional resources for drivers, and vehicle analytics give operators a real-time view into the health of their assets to proactively address potential issues. Several companies, including Amazon itself, have started work on apps that connect under-utilized resources with shipments that need to get out the door. These real-time connective technologies will help truckers and Amazon keep delivery latency low and customer satisfaction high.
Delivery speed isn’t the only benefit; these technologies also show exactly where a shipment is in its travels. Notifications on when a shipment is going to arrive or if it’s running late add more intelligence to the supply chain, which benefits both the shipper and the end customer. These services also provide perks for smaller fleet owners, aside from providing them with the work, such as calculating their fuel tax.
If this year’s Prime Day was any indication of how Amazon is going to operate, then it’s Amazon’s world and we’re all just living in it. For trucking operations, it’s also a world full of potential. That includes local delivery service companies as well as long-haul freight transporters. The savvier among them will see that this year’s Prime Day is a healthy indication of what every day will look like for the transportation industry.
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