There are several stories this morning about initiatives Amazon is making on the logistics and supply chain front.
• Amazon has announced a new initiative, Supply Chain by Amazon, which it describes as “an end-to-end, fully automated set of supply chain services that will provide sellers with a complete solution to quickly and reliably move products directly from their manufacturers to customers around the world.
“Supply Chain by Amazon enables sellers to benefit from Amazon’s advanced logistics, fulfillment, and transportation capabilities to keep products in stock, ship faster and more reliably, and significantly lower costs.
“With Supply Chain by Amazon, Amazon will pick up inventory from manufacturing facilities around the world, ship it across borders, handle customs clearance and ground transportation, store inventory in bulk, manage replenishment across Amazon and other sales channels, and deliver directly to customers. Sellers can now focus on building great products for their customers and growing their business, while Amazon handles the logistics, reduces costs, and improves delivery speed.”
• TechCrunch reports that Amazon has announced “an expansion of its logistics network that will allow its selling partners to move their products in bulk from Amazon’s low-cost storage service, Amazon Warehousing Distribution (AWD), to any sales channel, including physical stores and warehouses, instead of only directly to consumers’ doorsteps.
“The new solution, called Multi-Channel Distribution (MCD), will allow sellers to replenish all their sales and fulfillment channels from a single inventory pool, Amazon explains, which simplifies supply chain management and allows for cost savings on inbound shipping.
“The solution also allows sellers to leverage Amazon’s investment in its distribution network and technology to maintain the right inventory levels across all their sales channels, including online and physical store locations, in order to grow their business.”
The story notes that MCD currently is being piloted with a limited number of sellers, and that a national rollout is expected in coming months.
• From CNBC:
“Amazon said it plans to boost wages for contracted drivers as part of a $440 million investment this year into its third-party delivery program but declined to say by how much.
The company announced the pay bump at an annual, closed-door conference called Ignite Live with the 3,500 small businesses that make up its delivery service partner program. The DSP program, launched in 2018, comprises about 279,000 drivers, often distinguishable by blue Amazon-branded vans, who are responsible for delivering packages the last few miles to shoppers’ doorsteps.”
According to the story, “DSPs are free to set their own wages and incentives, but Amazon sets basic minimums in its contracts with the third-party providers. “Amazon did not say how much it was raising wages, but the company now anticipates the average delivery associate will earn $20.50 per hour on average, or more, plus benefits.”
KC’s View:
Amazon is continuing to develop new and expanded revenue streams by becoming an increasingly aggressive and competitive services company. Makes sense, though I’m not sure these moves are endearing it to the Federal Trade Commission (FTC), which seems utterly persuaded that Amazon has its fingers in way too many pies.
As for the driver raises, the Teamsters have been pushing to organize employees in Amazon’s extended driver workforce, and while this may in part be a way to address concerns, I doubt it is enough. Amazon, it seems to me, is likely to be dealing with a lot of labor issues on this front.
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