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Amazon’s Shipping Empire Is Challenging UPS and FedEx

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Re: Amazon’s Shipping Empire Is Challenging UPS and FedEx

#51

Earlier quoted context omitted.

Natural monopoly means that it's not possible for more than one supplier to survive. This is clearly not the case for packages delivery. For consumers the more suppliers the better.

I think what he means is sometimes there is a benefit to having one service provider. For instance, it is cheaper if a city offers trash pickup in a district to one service provider. The logic is that it’s much more efficient to have one truck stop at each house versus trucks zig zagging around each other.

hm, being 'more efficient' would be true if the ideal way was known.

Waterfall would also be 'more efficient' if we knew the right product to make and way to make it. If agile has taught us anything it's that we don't know and we can't know. We learn through trial and error and continually innovate. If there is only one company there is no incentive to innovate and discover better efficiencies.

So while the 'logic' is right, the supposition[0] is incorrect.

This is why 'the market' is the best way in practice. We observe an ebb and flow of centralization (Amazon is a good example) and decentralization in various industries. This is caused by innovation and disruption. When one company innovates/disrupts so well and continues to execute it can become a de facto "monopoly," gaining near 100% market share.

When the industry and market are allowed to continue unabated[1] this 'monopoly' can eventually be broken if the company fails to innovate and leaves the industry vulnerable to upstart disruptors. The very possibility means even with 100% market share the company is not a true monopoly, and in practice the consumer benefits from the company's 'existential fear' which motivates it to continue to serve its customers in better and better ways.

[0] knowing the best way [1] assuming the major player(s) doesn't lobby/enact regulations to protect its market/industry position

edited footnote formatting

Re: Amazon’s Shipping Empire Is Challenging UPS and FedEx

#52
post #44

Huh, missing from this article is the thousand or so DSP that service Amazon for shipping, basically contracting companies. A lot of Amazon shipping is actually Amazon corporate, but a huge chunk is a thousand smaller shops. Turns out you can also contract with those shops as a private citizen to just ship random heavy stuff anywhere for super cheap. Because Amazon gives them enough volume, it's become cheaper for in…

>"strange side-effect"

reminds me of McDonald's single-handedly bringing down the price of beef

Re: Amazon’s Shipping Empire Is Challenging UPS and FedEx

#53
post #9

Earlier quoted context omitted.

Much like AWS spun out of their in-house experience running flexible computing infrastructure, this would be a natural fit for them to flex their logistics strengths. Via their multi-channel fulfillment offerings, you can already use Amazon's logistics network to ship your products sold on or off of Amazon. This would just be supporting more type of shipments than just fulfillment. On the other hand, Fedex, DHL, UPS…

Yeah, but most ecommerce operators have no incentive to use Amazon, because you are paying your competitor. There is a reason most grocery stores are shifting, or have already shifted to, Google or Microsoft for their cloud infrastructure.

>paying the competitor

it's a good point, yet many still use Amazon/AWS regardless. Netflix, for instance (AWS). Then, on the micro-scale: FBA[0] sellers (Amazon Marketplace).

I assume it has to do with the ultra low barrier to entry which Amazon/AWS provides. The convenience factor is off the charts. Nevertheless, I assume Netflix has ideations of following in Dropbox's footsteps.[1]

[0] "Fulfilled by Amazon"

[1] abandoning AWS for self-owned dedicated infrastructure

Re: Amazon’s Shipping Empire Is Challenging UPS and FedEx

#54

What is interesting is that an American company is copying Chinese companies after pulling out of China because they could not compete with the local companies. Both JD & Taobao/Tmall have their own large shipping empires in China. I suspect that was part of the reason they pulled out. They could not compete using 3rd part shipping companies. Now they are doing the same thing in their home market.

But Amazon started logistical services before some of those companies even existed. Seems like a creative re-write of history.

When did Amazon start logistics? I know for a fact that Taobao/TMall was doing it in 2012. There was a distribution hub at the end of my street. I assume they had been doing it a few years before then but not 100% sure when they started.

You are correct JD didn't exist back then since it used to be called 360buy and they used 3rd party shipping companies.

After becoming JD they started shipping themselves. Not sure about the year.

Probably right about JD but as far as I know Amazon didn't start doing logistics till after 2013.

Am I wrong about the dates?

Re: Amazon’s Shipping Empire Is Challenging UPS and FedEx

#55
post #47

Both UPS and FedEx deliveries arrive at my front door in good condition, the delivery drivers bag the packages up if I'm not home and it looks like rain. USPS consistently rings my doorbell and makes sure packages are handed to me rather than left outside. Amazon delivered packages have been: thrown from the street; arrive crushed, punctured, or otherwise damaged; left in the driveway; left in the neighbors yard; nev…

I think service for any of these companies is highly variable and dependent upon locale. Perhaps it's a culture thing. The USPS worker never rings my doorbell for left packages and just yesterday a package was delivered damaged in my mailbox. I live in a nice part of town (I think) but the service culture here may be different than where you live (and different than other locales where I've resided).

Re: Amazon’s Shipping Empire Is Challenging UPS and FedEx

#56

What is interesting is that an American company is copying Chinese companies after pulling out of China because they could not compete with the local companies. Both JD & Taobao/Tmall have their own large shipping empires in China. I suspect that was part of the reason they pulled out. They could not compete using 3rd part shipping companies. Now they are doing the same thing in their home market.

JD has its deliver and warehouse and still use network of delivery companies and warehouse too. Tmall and Taobao use a network of delivery companies their own logistics arm Cainiao is not that big in warehousing and last mile delivery like SF Express or YTO. In reality logistics is capital and labor intensive industry, Amazon will have trouble once the retail growth flatten but the cost structures are high. Amazon on…

Taobao shouldn't have many warehouses because of the business model.

I'm not sure about TMall but I know that in Beijing they used to have a distribution point roughly every 10km through the whole city.

When you used to setup your address you selected the closet distribution center to you (I assume because the maps were not setup then. You don't select it any more.)

When I buy packages in Shanghai about half of them are delivered through a 3rd party and the rest are direct. It may just be my area though. I assume it depends where the product is come from...

Re: Amazon’s Shipping Empire Is Challenging UPS and FedEx

#58

Earlier quoted context omitted.

"Transportation By Amazon" (TBA) has been a concept at Amazon since around 2010 or so. Originally the concept was that Amazon would accept shipments from business customers and inject those shipments into Amazon's sorting and shipping network using the rates negiotated with various carriers. Since most of Amazon's negiotated rates with carriers are lower than what carriers offer to consumers directly, customers get l…

Given how often I've had packages thrown haphazardly by Amazon drivers, I will gladly pay extra to have USPS handle my packages with slightly more care. It's an interesting idea, but their drivers are destroying their image before they've entered the market.

Poor behavior by delivery drivers happens across all carriers, USPS included.

If your package is damaged, I would recommend contacting Amazon customer service and let them know. Based on the way they do scans and metrics, they know who the delivery driver was and it will reflect in the delivery driver's customer satisfaction score.

If there are enough compliants against a given delivery driver, they will probably not remain a delivery driver for long. Amazon wants to keep customers happy at all costs and will quickly sack employees and contractors who fail to meet their standards.

Re: Amazon’s Shipping Empire Is Challenging UPS and FedEx

#59
post #47

Both UPS and FedEx deliveries arrive at my front door in good condition, the delivery drivers bag the packages up if I'm not home and it looks like rain. USPS consistently rings my doorbell and makes sure packages are handed to me rather than left outside. Amazon delivered packages have been: thrown from the street; arrive crushed, punctured, or otherwise damaged; left in the driveway; left in the neighbors yard; nev…

You're being downvoted, but you're not wrong. Amazon's deliver is terrible for me as well, never had a problem with UPS or FedEx (USPS is slightly less reliable, but still WAY better than Amazon).

Re: Amazon’s Shipping Empire Is Challenging UPS and FedEx

#60

Earlier quoted context omitted.

Given how often I've had packages thrown haphazardly by Amazon drivers, I will gladly pay extra to have USPS handle my packages with slightly more care. It's an interesting idea, but their drivers are destroying their image before they've entered the market.

Additionally, I have yet to ever have a driver ring the doorbell. They throw it at the house, mark it as complete, and trust that I’ll stumble across it later.

I would recommend signing up for the Amazon TextTrace delivery notifications. There is a prompt to sign up whenever you place an order.

The notifications will send you a text message to your mobile phone or a push notification to the Amazon app on your smartphone as soon as your shipment gets delivered.

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