August 16, 2023

Amazon unveils deferred ground delivery service

[ad_1] Inc. (NASDAQ: AMZN) has launched a non-urgent ground delivery service that appears to be aimed in part at shippers that don’t use Amazon for retail ordering or its fulfillment services.

The service, called Amazon Shipping, is designed for shippers placing orders through Amazon’s marketplace, a shipper’s own website and “other selling channels,” according to information on the company’s website.

Ground deliveries will be made in five days or less, Amazon said on the site. This underscores the deferred-delivery nature of the service. Support will be available 24/7, it said. The company did not respond to multiple requests for comment.

With rare exceptions, Amazon provides deliveries to merchants who order from its marketplace and who use the company’s Fulfillment by Amazon fulfillment and delivery services. The company has long considered getting into the stand-alone shipping business, which would put it in direct competition with other parcel-delivery carriers. But it has never pulled the trigger.

It planned to roll out such a service in February 2020. However, the subsequent surge in pandemic-related delivery demand forced the company to table the idea in order to manage the tsunami of business that headed its way once e-commerce demand took off.

The website note did not provide details on how Amazon would manage the business. It does not provide pickups except on rare occasions.

Amazon’s average daily volume is about 12 million packages a day, according to ShipMatrix Inc., a consultancy. Amazon does not publish average daily volume figures.

Amazon is UPS Inc.’s largest customer with about 7.5% of revenue, down from 11% in 2021. The companies are slowly winding down their business relationship, with UPS shedding Amazon parcels that don’t meet specific profitability criteria.

In the second quarter, UPS’ deferred volume dropped 22.4% year-over-year, compared to 12.1% for express and 8.6% for ground, according to ShipMatrix. The reduced Amazon business is responsible for the significant deferred-volume decline, ShipMatrix said.


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