Is Amazon's Bezos Getting It Right?

Do We Pan Amazon's Van Plan?

Amazon CEO Jeff Bezos has decided to augment the company's product delivery relationship with the Post Office, UPS, and Fed Ex by signing up independent contractors, each in charge of a fleet of several dozen Amazon vans, that will deliver Amazon packages the 'final mile'.

The claim is that Amazon won't be substituting for work currently done by the Post Office, etc., but that due to accelerating product volume that can't be accommodated, will instead merely supplement its current working relationships with 'last mile' delivery firms.

As a postal carrier, I'm a bit skeptical.  Here's how I see it:

  * A majority of Amazon's output, 62%, goes to the Post Office; 21% UPS, 8% Fed Ex, and 9% smaller carriers.

  * The Post Office is famously down-sizing.  Several years ago it closed smaller processing centers.  It could easily reverse course if it had a long-term contract with Amazon.

  * At the delivery level, the number of postal routes is constantly in flux.  Adding more volume to all routes simply means skimming off the excess and creating a new route or three in each office.  There are junior seniority personnel who would be delighted to work full time.

  * What about the additional clerks required to sort the added volume?  Again, postal jobs are desirable, and recent strides in automated parcel sorting have streamlined the process.

  * And the facilities in which the sorting takes place?  Our office is a 12-hour operation.  Expanding to 18- or 24-hours and adding auxiliary, package delivery carriers would only require additional carriers and vehicles (this is currently being done on Sundays, specifically for Amazon).  And, given a long-term contract, additional facilities could be built.

So, the claim that the post office can't accommodate Amazon's increased delivery volume seems a bit... convenient.  What's far more likely is that Amazon needs a backstop as it negotiates its contracts with the Post Office and other carriers.  That is, it needs the certainty of a baseline level of assured delivery so that it isn't forced to take whatever contracts are on offer.

Plus, there's the obvious matter of legacy costs (existing pensions, healthcare, etc., enjoyed by retired postal workers), which will likely make the Amazon vans strategy cheaper, or at least comparable to delivery by the post office.  Amazon will be paying local managers to hire and supervise delivery drivers for the company's vans, each of whom use the company's hand-held delivery devices.  No overhead, and no responsibilities otherwise.

The reasons why Amazon van plan isn't right:

  * It's slap-dash.  Amazon Flex is the company's current model for auxiliary delivery using gig economy workers.  Would-be delivery workers fill up their car trunks and back seat with packages at an Amazon warehouse, and using an Amazon smartphone, record deliveries as they drive a pre-determined route.  But, the work is not steady, it's demanding, and the levels of frustration are high.  So, the Amazon Van Plan can be seen as a refined version of what is currently being done in seat-of-the-pants fashion: using labor that will work for low pay, paying drivers by the delivery with no benefits; plus, providing shoddy support.  One can read the reviews.  And here is an overview, a description of a typical day working for Amazon Flex.

  * It's trading good jobs for no-benefit gig jobs.  Although Amazon says that their Van Plan won't impact existing delivery volume at the Post Office, etc., Amazon is the main actor in the decline of brick and mortar shopping.  This impacts salaried workers with benefits.  If, instead, it committed to working with existing carriers, good jobs would be traded for great jobs (postal workers can support their families in a middle class lifestyle, mainly because they enjoy union protection).

  * It's inefficient.  Postal carriers currently visit every household in the country, 6-days-a-week.  Adding another fleet of delivery vans to our streets is going to burn a lot more gas than adding additional routes and their delivery vehicles.  And we haven't gotten to how curbside mailboxes allow smaller packages to be delivered from a free-moving vehicle, as opposed to having to walk up to a front door, or up a flight of stairs, to deliver small parcels.

  * It's re-inventing the wheel.  Good postal carriers know their customers.  Does the customer want their too-big-for-the-mailbox packages by the front door?  By the garage door?  Would they prefer a notice for them to pick up a parcel at the post office (if they fear a package could be stolen).  These preferences will have to be learned...the hard way.

  * It's unrealistic.  A commenter named hope-for-the-best, posted this skeptical take on Amazon's van plan:

"So they expect me to operate a fleet of 20-40 trucks for a possible low end profit of 75K a year? 
With no guarantee of volume?
They can't possibly be serious... what idiot would be willing to do that?"

Read the overview and other comments, here.

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Amazon has the chance to make a permanent, positive, branding impression as its delivery volume increases.  A handshake with the Post Office could include this quote  "We're committed to using best-practices and happily employed workers."

And, without comment, here is Amazon CEO Jeff Bezos on the future of work:

"I predict that, because of artificial intelligence and its ability to automate certain tasks that in the past were impossible to automate, not only will we have a much wealthier civilization, but the quality of work will go up very significantly and a higher fraction of people will have callings and careers relative to today."