By now, everyone is aware that the most expensive aspect of the order-fulfillment process is last-mile logistics.
Since practically all products are readily available on various marketplaces and e-commerce is a highly competitive industry with minimal margins, businesses are constantly experimenting with new ways to reduce costs and gain an advantage over their rivals.
Order delivery has developed into a crucial tool for building a competitive edge in such a situation. Suppliers, as well as logistics and distribution firms, are continuously working to deliver items to customers more quickly and affordably while also giving them as many options as they can.
Supply chain and distribution businesses are impacted by economies of scale just like any other industry, and while higher volumes result in cost savings, last-mile logistics remains a specific problem. It's a challenge to deliver each delivery to a different customer's address. Unsurprisingly, more than half of the total cost of distribution is attributable to last-mile expenses.
In this article, we examine Amazon's efforts to bring down the price of last-mile delivery, as well as its upcoming projects.
The biggest issue for e-commerce is keeping up with rising delivery demands.
Supply chain and distribution businesses are impacted by economies of scale just like any other industry, and while higher volumes result in cost savings, last-mile logistics remains a specific problem. It's a challenge to deliver each delivery to a different customer's address. Unsurprisingly, more than half of the total cost of distribution is attributable to last-mile expenses.
In this article, we examine Amazon's efforts to bring down the price of last-mile delivery, as well as its upcoming projects.
The biggest issue for e-commerce is keeping up with rising delivery demands.
1. Same-Day Deliveries (2009): In 2009, when the world was unaware of today's quick delivery timings, Amazon launched it under the moniker of Local Express Delivery!
This was initially only available in certain US metro areas and had a limited distribution. Its logistics increased significantly yearly between 2009 and 2013. Additionally, purchases like the 2012 KEVA robots were made.
2. Operation Dragon Boat (2013): Through Operation Dragon Boat, they shared their knowledge of internal logistics and last-mile deliveries with the world. The company said that Amazon Prime Air, a fleet of 30 drones dedicated to last-mile delivery excellence, was under development the same year.
However, it has remained constrained by regulatory and air traffic rules ever since.
3. Upping the ante (2014): In order to keep up with its expansion, Amazon needed to increase its last-mile delivery capabilities, so it purchased a 25% investment in each of the shipping firms Colis Prive and Yodel. (Amazon completed the full acquisition of Colis Prive in 2016 and contributed to their fast expanding last-mile muscle.)
4. Amazon Prime Now (2015): A key component of Operation Dragon Boat, the now-ubiquitous Amazon Prime Now was introduced in 2015. In order to achieve last-mile delivery that was efficient and affordable and consistently met the "1-2 hour delivery," 58 delivery hubs were launched across the US.
5. Amazon Flex: The corporation chose to enter the on-demand industry after the remarkable success of Amazon Prime Now.
In contrast to rivals Postmates and Uber, Amazon Flex, an on-demand delivery service that sends products from Amazon warehouses to clients directly, was introduced with an infrastructure already in place. This allows for the inclusion of all drivers in the sharing economy, which is advantageous for order fulfilment.
6. Amazon Logistics (2018): Amazon Logistics was formally introduced in order to lower its shipping and fulfilment expenses, which in 2018 totaled a massive $27 billion and $34 billion, respectively.
8. Amazon Robotics Program (2020): Launched as a collaboration/service for entrepreneurs and delivery startups to develop cutting-edge, technologically advanced last-mile delivery solutions through partnerships with Amazon.
9. Starting in 2021:
• The Prime Air Program will build an aircraft fleet of more than 200 for last-mile delivery services.
• Prime Aircrafts: With the addition of 12 more aircraft, Amazon hopes to increase the size of its air fleet to 82.
• Air-hubs at the airports in Northern Kentucky and Cincinnati solely to improve their last-mile logistics
Here are a few of Amazon's major last-mile initiatives:
1. DSP (Delivery Service Partner Program): Amazon collaborates with up-and-coming logistics firms through this partnership programme. While Amazon provides the demand, i.e., the packages that need to be delivered to client addresses from their business facilities, the partner invests about $10,000 to establish up a delivery team. Amazon already has partnerships with about 2,000 such third-party delivery companies in the US alone.
2. Amazon Prime Air: Jeff Bezos pioneered the use of drones as a practical choice for package delivery as early as 2013!
With permission from the FAA (Federal Aviation Administration) to try out this technology, Prime Air aims to do just that.
According to the firm, since drones are electric and run on clean energy, operating them is also environmentally friendly. It pledges to achieve 50% of this goal by 2030 and aspires to make all of its deliveries carbon-free.
3. Amazon Scout: A fully electric robot created for doorstep direct package delivery to customers. Only Snohomish County in Washington presently has access to this facility, which is well-liked there.
As can be seen, Amazon has taken on the difficulties of last-mile delivery head-on. Amazon has no intention of slowing down any time soon, whether it is by constantly implementing new technology or by keeping a laser-sharp focus on reducing costs.
This e-commerce titan is obviously committed to controlling the last-mile delivery market. As a result, if you're searching for business solutions, it would be wise to learn how Amazon analysed and created its in-house logistics solutions.
You'll also learn that cutting-edge technological solutions like an automated, contemporary last mile delivery software are included into all such successful logistics systems of today.
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