DC Velocity - January 2018

dreds of local-delivery vehicles, and has 40 freighter aircraft for its Prime Air service—all of which could translate into millions of next-day deliveries, depending on how and where Amazon sources its freight. The company is also recruiting owner-operator truck drivers, who would bring thousands of power units to the table and provide over-the-road and last-mile local deliveries.

The company has made no secret of its desire to bring much of its transport and distribution activity in-house. For years, its shipping costs have exceeded shipping revenues—the latter generated through its fulfillment service—and observers suspect that gap has widened as shipment volumes have continued to grow. Amazon no longer breaks out shipping costs and revenues in its quarterly reports.

CARRIER MIX MAY CHANGE

According to data from transportation analyst SJ Consulting, about 90 percent of Amazon’s U.S. shipments move via UPS Inc., the U. S. Postal Service, FedEx Corp., and to a lesser degree, DHL Express, though Amazon has been using DHL’s hub in Cincinnati to house its air operations while its own hub is being built. The remaining deliveries are handled by regional carriers, local delivery companies, and independent truck drivers, according to SJ’s estimates.

Over the next few years, those smaller operators’ share of Amazon’s total volume will rise to about 40 percent, according to SJ Consulting’s projections. But due to projected 20 percent annualized growth in Amazon’s volumes for the foreseeable future, the major parcel and postal carriers will still see as much volume as they do today, according to Satish Jindel, the consultancy’s founder and president.

As envisioned under the pilot, Amazon would not use the big carriers as frequently as it does now, the source said. The e-tailer would rely on outside providers only on “high-confidence” routes, where it is virtually certain the two-day delivery commitment can be consistently met, the source said.

Amazon’s worries about service reliability are well founded, the source said. “They are not ahead of the curve, and they know it. Products are getting delivered late.” UPS disclosed that an undetermined number of shipments ordered during “Cyber Week,” the online ordering frenzy that occurs in the days after Thanksgiving, would be delayed due to an unprecedented volume of orders. An undetermined number of affected shipments were ordered through or fulfilled by Amazon.

The Raymond Corp. and

Pengate Handling Systems Inc., one of its authorized sales and service centers, donated a Model 8210 walkie pallet truck to help support the growing needs of the Koffman Southern Tier Incubator, a high-tech innovation lab. … In October, Freightliner Trucks and Old Dominion Freight Line (ODFL) celebrated their 26-year partnership at a ceremony at Daimler Truck North America’s Cleveland, N.C., plant. At the event, ODFL took ownership of a new Freightliner Cascadia, the 15,000th Freightliner purchased by Old Dominion since 1991. … Llamasoft, a supply chain optimization software and solutions provider, has launched Demand Guru, a new solution that enables companies to improve their supply chain design and strategic business initiatives by incorporating powerful causative demand modeling. … Freight brokerage Total Quality Logistics’ eighth annual Loads for a Cure campaign set another record in 2017. The company moved 30,313 loads Oct. 16th through 22nd, donating a portion of the proceeds to the American Cancer Society’s Making Strides Against Breast Cancer campaign. … After successfully completing the surveillance audit, logistics service provider Dachser USA has received its ISO 9001:2015 certification from Dekra Certification Inc. … AIT Worldwide Logistics, a global supply chain solutions provider, has formed a financial partnership with Charlottesville, Va.-based middle market financial firm Quad-C. … Florida’s Port Manatee has shattered prior annual records for container volume. The port’s count of 39,726 TEUs (twenty-foot equivalent container units) bested by 52 percent the 26,210 TEUs that moved through the port in the 12-month period ended Sept. 30, 2016, and was 31 percent more than the prior high mark of 30,431 reported for the fiscal year ended Sept. 30, 2010. … Commercial real estate services firm CBRE has released its Q3 2017 Houston Industrial MarketView report. The report is available for download at cbre. com/research. … Crown Equipment Corp has implemented a price increase as of Dec. 1, 2017. … Penske Logistics has introduced an initiative to honor the safest of its 4,500 truck drivers across North America. Twenty-six associates were recognized for their driving excellence at the program’s inaugural awards ceremony late last year. … BDP International has been awarded the ISO 27001 certification for ensuring its global import and export customers benefit from the highest levels of data protection.