Will retailers kill off transporters?

Will retailers kill off transporters?

Amazon is moving into transport in a big way: first airfreight and now local deliveries.

Amazon and Walmart are moving to take greater control of customer deliveries, increasing the level of vertical integration across their supply chains. Is this the start of a trend and should parcel companies begin to worry?

Amazon trials own service…

Analytiqa reports that according to press reports, Amazon is trialling a delivery service in the US to make more products available for free, two-day delivery. According to reports on Bloomberg, the service began two years ago in India, and in recent months, Amazon has been marketing the service to US merchants in preparation for a national launch.

Reportedly named ‘Seller Flex’, trials have started in US West Coast states in anticipation of a wider launch in 2018

Set to rival the activities of parcel carriers like UPS and FedEx, Amazon will manage the pickup of packages from warehouses of third-party merchants selling goods on Amazon.com and their delivery to customers’ homes. Whilst Amazon could still use its traditional couriers for deliveries, it will now decide how a package is sent instead of sellers making those decisions, increasing the level of vertical integration across its supply chain.

The move is expected to provide Amazon greater flexibility and control over ‘last mile’ deliveries. It could assist in relieving overcrowding in its logistics centres as merchandise could be stored sellers’ own facilities, whilst also helping it to cut costs by achieving volume discounts.

… while Walmart buys Parcel delivery company

Walmart has acquired Parcel, a technology based, same-day and last-mile delivery company specialising in perishable and non-perishable delivery to customers in New York City. They also provide services like scheduled evening delivery and custom text message notifications for high-growth e-commerce companies looking to differentiate their customer service.

Parcel will continue to serve its existing clients, but Walmart will also utilise the start-up’s technology and network of delivery employees to offer its own same-day delivery for both Jet.com and Walmart.com in New York City.

Jet already delivers some orders for no extra fee on the same day they are ordered, and Walmart believes Parcel will help it reduce the operating costs associated with those deliveries. Walmart.com will also start testing same-day delivery in the city soon, and both Jet and Walmart will offer both general merchandise as well as fresh and frozen groceries as part of these new express delivery options.

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