Amazon Revamping Delivery Network, Could Turn To Using Same-Day Courier

Amazon knows what it takes to do retail, as it continues to beat the competition online. What the retailer feels it needs improvement in is its’ delivery network. Last year’s Christmas shopping season turned out to be a disaster for the retail giant, as their primary partner UPS failed to deliver on-time, not to mention other deliveries. It became clear that the delivery of the product is just as important as the purchase itself. The buying is the shopper’s part. The delivery is Amazon’s. It wants to make its’ delivery network stronger and Amazon is evaluating how this can get done.

The article covered the grocery and general merchandise delivery options Amazon can choose to implement to get the results it wants. A parcel carrier could work, which could entail the carrier bringing the general merchandise from their sorting location, and combine it with the grocery delivery truck at the Amazon fulfillment center. It would be very challenging to get the delivery done the same-day. Here are some of the quoted changes Amazon stated it will implement to revamp its’ delivery network:

• UPS, who has been the primary carrier, will be replaced by a network of regional carriers.
• The top 40 markets will be served by a private fleet being built by Amazon to support an expansion of its online grocery business” (Amazon Fresh). This means there will be a big expansion from the three metro areas currently served by Amazon Fresh.
• The private fleet network will co-mingle groceries with general merchandise.
• Orders will be routed through Amazon’s 55 fulfillment centers, with deliveries made the same day, the next day or, at most in two days.

The main discussion in the Forbes article was whether utilizing a same-day courier could be the key to the optimal delivery revamping that Amazon is looking for. The advantage of using a courier is a courier specializes in same-day delivery. This is their expertise and they are reliable at doing it. A courier service can transport general merchandise and groceries directly from point-to-point within hours. Same-day delivery is the goal for AmazonFresh, which currently is rolled out in a small number of markets.

The disadvantage of using a courier is primarily the cost. For this type of service, a courier can be expensive. Yet, with a same-day courier like A-1 Express within a market with the right demographics, such as San Francisco, pricing can be lowered and there will be high volume in big cities. It makes sense to use this Los Angeles Courier solely or in conjunction with a private fleet. A courier is also a great source to correct delivery errors, redeliveries and product returns.

Amazon indeed has high expectations and so does its’ customers. Whether groceries or general merchandise, Amazon has to deliver or its’ competitors will. Wal-Mart, for example, has launched a same-day grocery service of its’ own. “WalMarttoGo” not only offers same-day delivery of groceries ordered online, but shoppers can also pick up their order at a local Wal-Mart store. This isn’t an option that Amazon has for its’ shoppers. Amazon’s delivery network has to be effective to compete long-term.

Reference: 3.19.14, Forbes Magazine, Steve Banker, Amazon Revamps Its U.S. Delivery Network

Postal Service Seeking More Profits, Deliver Packages On Sundays And Same-Day Delivery

It is a great time for the Postal Service, as it has begun to see some daylight after the years of losses. The mailing giant only suffered $5 billion in losses last year, which is a big difference from almost $16 billion in 2012. This is due to some major restructuring with the company’s business strategy and it’s working. The Postal Service is now pursuing to shut down Saturday mail deliveries, which will give it even more flexibility to implement other services that generate more revenue.

The Federal Times reported that the Postal Service is now seeking after delivering packages on Sundays. This would mean it will provide package deliveries every day of the week. It is something that the Postal Service has found is being well-received by customers so far, as it currently offers package deliveries in a number of US cities already. Those cities include New York City, Los Angeles, some areas in Texas, and some Mid-Atlantic areas.

The company believes the shift to Sunday service will be pay off, as Postmaster General Patrick Donahoe made the announcement of the company changes at the annual National Postal Forum. He stated at the forum, “That is why we are moving toward the seven day model. It has caught on like wildfire in New York. We have a whole group of customers there”. When the demands and needs of the customer changes, businesses must evaluate their services and change along with them. The Postal Service is making the right changes before the company was going to clearly hit rock bottom.

At the forum, Donahoe also mentioned about the new venture of same-day delivery, which the Postal Service is offering in New York City, which is also known as Metro Post. It has been successful there as well. Same-day delivery is a service that is becoming more popular involving meeting the delivery needs of online customers. Online retail has consistently grown at 16% annually in recent years, as more customers shop and conduct business via mobile devices. Now, there is a huge market for customers that desire their online purchases to arrive at their front door the same-day.

It’s a service source that the Postal Service can have an advantage in long-term. E-retailers like Amazon, eBay, and Wal-Mart have implemented same-day delivery in a number of US cities. However, unlike the Postal Service, none of them have a vast and robust vehicle fleet that can cover the entire country. The other viable option for the e-retailers is to invest in their own delivery fleet or partner with a same-day courier like A-1 Express to perform the deliveries for them. The Charlotte Courier can help online companies with same-day delivery nationwide.

All of these e-retailers show no signs of slowing down, as they continue to make major investments to develop their own effective version of same-day delivery. Amazon and Wal-Mart even provide same-day grocery delivery services in Seattle, Los Angeles, Denver, and more. The Postal Service is currently partnering with Amazon to perform their same-day deliveries in New York and this relationship will probably grow.

Reference: 3.18.14, www.federaltimes.com, Andy Medici, Postal Service pushing package delivery into Sundays

UPS Rates Increasing In 2014, E-Retailers Can Use Same-Day Courier

Shipping your packages as a customer is one thing, yet shipping packages as an e-retailer is another. Transportation makes up 25-35% of the cost of a product, therefore, on a volume scale it is crucial to have a shipping system that is cost effective. Most e-retailers utilize worldwide carriers like UPS to conduct loads of shipping functions for them. If their shipping costs go up, it will directly effect the retailer.

Now with the latest news about UPS and their upcoming rates for 2014, retailers will definitely have to see how they will adjust to the rate changes. UPS has announced its’ rates will have an average increase of 4.9% in 2014, reported Internet Retailer. The new rates will actually become effective as of December 30th. of 2013. Where e-retailers will really experience the hit is in regards to small packages, which is what e-retailers mostly ship. This is what the president of LJM Consultants Ken Wood stated in the report, which is a firm that advises retailers and other shippers on shipping costs.

What happens with the increase of shipping costs by UPS, and even Fedex, is based on certain factors, which determines the types of freight that will go up the most. In the case with UPS, the price increase will actually affect lighter shipments more than heavier shipments. Both UPS and Fedex divide up their shipping destinations into zones and than bases the shipment rates on where the freight is going. For example, a shipper’s home zone traveling two zones over is shipping to Zone 3. Along with the weight classification, they both determine the overall shipment rate. The higher the combined weight and distance, the more the customer will pay.

With this in mind and the rate increase, e-retailers which ship packages that are ten pounds or less, will feel the hike in price by UPS the most. Ken Wood gave an example in the report of how a three-pound package to a zone seven will increase by 7.84%. This equates to a jump from $8.55 to $9.22. In contrast, to ship a 130-pount package to zone 5, will only go up by 2.61%, which equates to an increase from $65.01 to $66.71. For one small package for an e-retailer this doesn’t seem like much, however, when you calculate this in terms of high volume, it is a bit of an increase.

With the rate increase by UPS, many e-retailers will probably seek out new shipping strategies and concepts to get their products in the hands of their customers. Business trends are definitely changing as it relates to e-commerce. Customers are even wanting their packages faster, which has opened the door wide open for same-day delivery. This is the direction a number of e-retailers have turned to as another delivery solution. Large retailers such as Wal-Mart, eBay, Amazon, Macy’s, Target, and more, have all begun to engage in same-day delivery.

For long distances, UPS will probably be what e-retailers will have to continue to go with. However, the creation of closer fulfillment centers and shipping from physical retail stores, creates the viable option for same-day delivery to work. E-retailers can turn to a Same-Day Courier such as A1Express and have their online products delivered locally in a matter of hours. The Kansas City Courier has a national footprint as well, enabling it to assist e-retailers locally on a national scale.

Reference: 11.25.13, Internet Retailer, Paul Demery, Average UPS rates will go up 4.9% in 2014

Instacart Taking On Amazon For Same-Day Online Groceries

Amazon is expected to begin one of its' most anticipated business ventures--online grocery deliveries. CNN Money recently reported Instacart founder Apoorva Mehta is taking online giant Amazon, as they both go full steam ahead towards revolutionizing the online grocery business.

How can this one man and his new company take on the world's largest online retailer? Mehta is an ex-Amazon engineer, therefore, he knows something about the online market and how to make it work. Being a former employee of Amazon more than likely has armed him to be able to make this big move. He is familiar with the cons of AmazonFresh and has the experience backing his company Instacart. If anyone has an edge and the knowledge to do it, it just might be Mehta.

Instacart's report more than likely comes in response to Amazon's announcing its' plan to expand AmazonFresh, which will incorporate the selling online food with high-margin item deliveries. Amazon says AmazonFresh has been tested for at least five years in hometown Seattle and is now ready to launch in other cities. The first two cities will be Los Angeles and San Francisco later this year. In Seattle, Amazon has utilized its' own fleet of trucks to perform deliveries of fresh food products.

Instead of building new warehouses in nearby areas like Amazon, Instacart is using an existing infrastructure, one that includes well-known supermarkets and 200 contracted personal shoppers across the San Francisco Bay, in which Instacart is available for its' customers.

Amazon appears to be taking an approach to the online grocery market that is, in Apoorva Mehta's opinion, is unwise. The online leader strategy is to gain their online food profits by selling other products, at the same time, that consumers already order online. Mehta's responded to this strategy in the article stating, "We were delivering Xboxes with your groceries. That may seem like an interesting idea, but how many times do you need to buy an Xbox?"

For the most effective method of delivery, online both Amazon and Instacart will have to have the online groceries arrive at a shopper's doorstep fast. Instacart may very well utilize contracted shoppers, however, Amazon stated they may utilize same-day couriers to handle their food deliveries. Competitors such as Wal-Mart and even Target, are already testing same-day delivery within several city markets in pursuit of online grocery deliveries.

Mehta's Instacart appears to have a good plan, however, the delivery aspect will be vital for its' online grocery execution. Same-day courier services like A-1 Express has a national footprint for same-day delivery and will be just the right fit to meet online demand. This San Diego Courier can partner with Instacart and develop an optimal courier logistics solution. A-1 Express has a high level of courier expertise and can provide quick implementation of food deliveries and keep up with company expansion, as the online food industry grows.

References: 6.18.13, CNNMoney, JP Mangalindan, This ex-Amazon engineer wants to outsmart Jeff Bezos

Wall Street Transcript Forecasts Consumer Demand To Increase For Same-Day Delivery

In recent years, there has been a growing pursuit of same-day delivery by online retailers. E-commerce is currently growing at an annual rate of 16% per year. With the use of mobile devices, such as ipads, smartphones and tablets, many experts forecast online business shows no signs of slowing down. As online growth increases, the option for same-day delivery is increasing as a viable option for online orders.

According to the Wall Street Transcript, same-day delivery will not only be a viable option, but will become a standard consumer demand within the e-retail industry. It has just published an internet services report, reviewing topics such as increased mobile content traffic, Chinese online monetization trends, internet infrastructure and services consolidation, an social networking economics. The report informs serious investors and industry executives of what is forecasted to come regarding certain sectors. The feature provides interviews with public company CEOs and Equity Analysts regarding the discussed industries.

Within the report, the companies discussed are online retailers involved in some level of same-day delivery and online shipping. Those included in the report are Amazon, Google, eBay, Nordstrom, Yahoo, and more. Within one of the report excerpts, an expert analyst discusses the outlook of the industry and what is to come for the online retail industry. One question the expert was asked to talk about was the next battle within the e-commerce war. The above mentioned companies are engaged in fulfillment and omnichannel capabilities within e-commerce. With online giants such as Amazon and eBay, the expert also discussed other players in the e-commerce war that will have an impact on the industry in the future.

Mr. Pitz offers insight on the companies and the impact of same-day delivery. One of his quotes from the report regarding online retailers was he stated, "We believe as companies including Amazon continue to build out their capabilities in same-day delivery, same-day delivery eventually becomes a have-to-have for the average consumer, although that customer may not even know it yet". He mentions same-day delivery will shift into the same scale of demand as two-day shipping, which Amazon launched years ago. Same-day delivery will become a value-added service to consumers.

He continued on regarding Amazon being a key player, driving the offer of the same-day delivery option to consumers. "So we believe Amazon will continue to raise the bar and provide consumers with the merchandise that they thought they would receive in two days, but actually receive in one day or less", stated Mr. Pitz. Amazon-owned companies such as Quidsi, has brands Soap.com and Diapers.com, which are successfully offering same-day delivery. Amazon also implemented in its' fulfillment centers what is called the Kiva System. This system is used to optimize small package shipments and improves productivity for shipping. With Amazon using this system, the company will continue to create efficiencies and ship faster.

The direction is clear that same-day delivery is creating a major revolution in the business world and brick-and-mortar stores have to make the shift. Large retailers such as Wal-Mart, Macy's, and Target are testing same-day delivery as well. Same-day courier services like A-1 Express can be partners of Amazon, Wal-Mart, or any other retailer seeking to provide same-day delivery. The Los Angeles Courier has a national footprint and can quickly implement a courier logistics solution for the increase of consumer demand for same-day delivery to come.

References: 5.21.13, Yahoo News, The Wall Street Transcript, Consumers Expected to Start Demanding Same-Day Delivery Shipping as an Increasing Number of Online Retailers Begin to Offer the Option