Amazon pushes dedicated truck operation;
will it suck oxygen out of the driver room?
Is Amazon.com Inc. draining the commercial truck driver
pool?
Yes, according to a top motor carrier executive, who told
one of the company’s best customers—a shipper prepared
to tender abundant and predictable traffic at highly compensatory rates—that it would only agree to a 90-day contract extension once the agreement comes up for renewal
this month.
According to a person familiar with the matter, the carrier
executive said that drivers who would normally be available for recruitment were instead migrating to Amazon.
The executive added that equipment and drivers would
be diverted to the spot, or non-contract, market, which
remains sizzling hot and appears to be a better deal for the
carrier than signing static contracts, the person said. Neither
the executive nor the carrier nor the shipper was identified.
At first blush, the executive’s rationale appears absurd.
Amazon has, by one estimate, a paltry 300 power units,
a fleet size that would hardly move the needle. By contrast, Green Bay, Wis.-based Schneider Inc. and Omaha,
Neb.-based Werner Enterprises Inc., both of which are
big truckload carriers and logistics service providers, have
10,800 and 7,300 units, respectively. FedEx Freight, the less-than-truckload (LTL) unit of Memphis, Tenn.-based FedEx
Corp., has more than 20,000 tractor-trailers.
But as with everything at Amazon, there is more going
on than meets the eye. For example, in March the company was at the huge Mid-America Truck Show (MATS) in
Louisville, Ky., to recruit fleets to join its dedicated trucking operation. The business, which goes
by the name of Amazon.com.dedc LLC, wants
fleets that have at least three trucks, their own
operating authorities, and drivers who can operate twin-trailers to haul goods in the company’s
distribution center network, Amazon said in literature distributed at the show.
BIG PLAY FOR TRUCKERS
In his pitch, Greg Sellers, program manager of
linehaul distribution, said the company is “
working with linehaul providers of all sizes” and will
“continue to recruit for trucking companies to
join our team.” The unit offers a “steady, high
volume of freight, the ability to plan ahead, automatic weekly direct-deposit settlements, as well as
a roster of lifestyle features that trucking company
employees really seem to like,” Sellers wrote. He
didn’t elaborate on the specific amenities.
All the freight is of the “drop and hook” variety,
meaning a driver drops off a full or empty trailer
at a specified location and moves on with another trailer,
either empty or full, without waiting for the dropped-off
equipment to be unloaded. Drivers can be home the same
day or, at worst, the next day, according to Sellers. “There’s
work for singles and teams” as long as the drivers are
employees of the trucking company, he said.
Drivers need only bring the power units to the engage-
ment, Sellers said. That is of little surprise, since Amazon
has bought or leased thousands of trailers in the past few
years in readiness for what has long been believed to be
a massive rollout of a nationwide transport and logistics
network. The project’s main goal is supporting the two-day
delivery commitments of its popular “Prime” service.
In April 2017, Amazon joined a portal that “on boards”
prospective drivers to ensure they have the proper operat-
ing and insurance documentation. At the time, Amazon
was looking to recruit as many as 30,000 owner-operators.
Amazon currently moves between 5 and 10 percent of its
orders through its own network. The rest is outsourced to
the U.S. Postal Service, UPS, FedEx Corp., and an assort-
ment of regional and local parcel delivery firms. With
volumes growing at a double-digit quarterly clip, Amazon
believes it needs to supplement its carrier relationships with
its own network to meet its delivery pledges. “The program
is going well, and we’re proud to offer opportunities for
small businesses to grow working with Amazon,” said Kelly
Cheeseman, an Amazon spokeswoman.
—M.S.
Third-party logistics service provider RK Logistics
Group has promoted Cindy Traver to vice president of operations. … BDP International, a privately owned global logistics and transportation
solutions company, has hired Chris LoPriore as vice
president of global sales and marketing. … Vargo,
a provider of systems integration services, warehouse execution software, and equipment solutions for fulfillment and
distribution centers, has welcomed Matthew Ackerman to its
team as a systems control engineer. … Transplace, a provider
of transportation management services and logistics technology solutions, has appointed Chris Nester chief financial officer.
… Sato, a provider of auto ID solutions, has appointed Tim
Cook president of Sato America. … Brian C. Neuwirth, vice
president of sales and marketing at Unex Manufacturing Inc.,
was honored with the 2018 Outstanding Young Professional
award by the trade group MHI.
newsmakers
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