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How Amazon Burnishes Logistics Credentials Versus ‘Incumbent’ FedEx, UPS

Amazon continues to build up its delivery capabilities in an effort to maintain independent logistics in its operations.

An Amazon spokesperson confirmed a report in Business Insider that it is rolling out a fleet of branded truck tractors to haul the branded trailers it has had since 2015.

“We’re welcoming new equipment to our transportation fleet,” the spokesperson said. “The Class 8 tractors will be utilized to support our line haul operations.”

These would help Amazon establish a proprietary fleet of trucks to haul heavy loads of goods between distribution centers or intermodal transportation hubs.

Continuing to take hold of its own logistics, Amazon reached a strategic agreement with Cargojet to expand their existing commercial agreement for overnight air cargo services and charters that incentivizes Amazon’s use of the provider to support fast delivery for its customers in Canada.

Amazon uses Cargojet’s overnight air network to move packages from its own facilities to other Amazon or last-mile carrier locations before final delivery to customers.

Cargojet plans, over time, to add more non-stop flights allowing later departures and earlier arrivals to the 15 major cities that Cargojet already serves, and to add new cities on its overnight network. These service and frequency enhancements will be available to all Cargojet customers, and will expand Cargojet’s reach to approximately 95 percent of the Canadian population.

In a recent report, Goldman Sachs said, “Amazon is definitely a concern for the incumbent express companies, as Amazon has brought more of its transportation service requirements in-house.”

In August, FedEx said it would no longer make ground deliveries for Amazon, since Amazon is developing its own delivery fleet, putting it in direct competition with the shippers that had long delivered its packages.

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Last year, Amazon launched a program aimed at helping entrepreneurs build their own companies delivering Amazon packages, while serving as a solution to the “last mile” challenge. Under the initiative, successful owners can earn as much as $300,000 in annual profit operating a fleet of up to 40 delivery vehicles, with Amazon taking an active role in helping interested entrepreneurs start, set up and manage their own delivery business.

Last week, Amazon announced it was expanding its fulfillment center in Channahon, Ill. The new facility will total more than 1 million square feet and create 500 new, full-time jobs. The company also said it plans to open its first fulfillment center in Idaho. The state-of-the-art facility, located in Nampa, will open in 2020.