Editor's Comment

Amazon’s logistics ambition, Millennials’ delivery demands and an Irish perspective

Amazon is up to something. I know, I know … it’s always up to something or other.

But this time, if the smoke signals are to be believed, that something could have long-lasting implications for the carrier sector.

It’s quite possible that last time I ploughed the Amazon’s at it again furrow may well have been to cover the launch and/or expansion of Prime Now, the one-to-two hour delivery service for Prime customers. It’s no surprise then that they’ve been at that again too. Manchester and its environs – from Stockport to Salford, from Wythenshawe to Oldham – is now covered by Prime Now. Pretty handy if you’ve any last minute Christmas shopping to do, especially as orders placed as late as 9:45pm on Christmas Eve are still eligible for a super speedy Prime Now delivery.

But that isn’t the at it again I was thinking of. Because if what we’re hearing (and reading) from our friends at Tamebay is true, 2016 might see a genuine game-changing move from Amazon where logistics is concerned.

In short, Amazon is said to be embarking on a plan that will see Prime retailers given no choice other than to start using Amazon Logistics instead of the carriers they currently have relationships with.

You can read the Tamebay piece here. If Amazon has indeed set its sights on becoming, to all intents and purposes, a carrier in its own right, it’s a move that will throw up a good many challenges – to itself as well as the rest of the sector. Currently it doesn’t have the reach – regardless of its impressive bulk. But growth is a factor of resources, determination and time. Three things Amazon won’t struggle to find.

Certain carriers will face a loss of volume if Amazon starts to go direct to both retailer and customer. But there will be a protracted period where it still needs carriers to handle those parts of the UK where it lacks reach; carriers will get stuck with the costly rural business while Amazon fills its boots in high population density areas – such as those where Prime Now is on offer.

Retailers will face the prospect of systems integration and/or updates to accommodate Amazon Logistics, and in many case setting up bespoke bays for its trailers, either in place or in addition to those it already has.

For both retailer and carrier falling into step with Amazon will be costly.

Of course, they’ll all do so willingly with no resistance whatsoever.

Elsewhere on eDelivery, research from eBay Enterprise and Imperial College highlights the gap between younger shoppers’ expectations of delivery with bells and whistles and their reluctance to pay for it. While 74% said flexible delivery options were a very high priority, almost half said they don’t want to pay for it. It’s not easy being innovative and bringing new services to market if people are unwilling to pay for them. So it’s encouraging to see businesses from the ecommerce and delivery disciplines being recognised by the UK government’s Tech City body, with around one third of new entrants to its Future Fifty programme of high potential growth companies coming from the sector.

We have two stories with an Irish connection in this week’s newsletter – one is a case study of an equine supplies company, Horseware, using voice technology in its warehouse, which was initially brought in to help cope with busy periods following a growth spurt. The other concerns the Republic’s largest independent carrier, Nightline, which grew by about 30% last year due in no small part to Irish shoppers’ appetite for cross-border ecommerce.

We’ve also reprised a feature from earlier in the year that looked at the fallout from peak 2014, which is an interesting point of comparison to where we are now; mid-way between Black Friday and Christmas Day, and there’s no sign of anything falling over. Not yet anyway.

As always, if you haven’t subscribed to eDelivery yet we’d love it if you did. You’ll get a weekly newsletter summarising the main stories we’ve covered, and we’ll keep you informed of other big announcements. But we won’t spam you – no one’s liked spam since the 1940s, have they? You’ll find details on subscribing here.

You can also join our LinkedIn group for analysis and networking as it happens, or if you want your updates in real-time find us on Twitter @edeliverynet.