Amazon.com. Inc. is struggling to handle some of its own two-day deliveries and has turned over about 1 million parcels a day to UPS Inc. and the U.S. Postal Service to meet its delivery commitments, according to a leading consultant.
Satish Jindel, founder and president of ShipMatrix, said Amazon (NASDAQ: AMZN) has shifted more middle-mile shipments to UPS’ two-day delivery service and more last-mile shipments to the Postal Service’s final-mile service, Parcel Select. UPS (NYSE: UPS) and the Postal Service are Amazon delivery partners. Those parcels were originally to move on Amazon’s network.
Much of the problem is occurring “upstream” where Amazon’s longer-haul middle-mile network resides, Jindel said. The lengths of haul of the shipments now being handled by UPS vary, he said.
The issues have nothing to do with the performance of Amazon’s last-mile drivers or the contractors, known as Delivery Service Providers, that employ them, he said.
Jindel, who went public with the comments after what he said were conversations with multiple Amazon stakeholders, estimated that the number of parcels affected is in the single-digit percentage range. Amazon handles about 16 million parcels per day, according to ShipMatrix estimates.
Amazon offers a broad range of delivery options, notably one-day shipping and its traditional mainstay of two-day shipping. It also makes different delivery commitments to members of its Amazon Prime ordering and delivery service, which includes unlimited two-day deliveries, and non-Prime users. The different offerings spawn variability and complexity, which adversely impacts Amazon’s delivery reliability, Jindel said. The problems are amplified by Amazon’s massive and burgeoning delivery volumes, he said.
In a statement, Amazon said that “delivery promises fluctuate based on a variety of factors including time of day, transportation capacity, regional demand, and customer location. No customers have lost 2-Day Shipping benefits.”
Amazon’s problems began around the middle of November and were unrelated to the company’s two-day fall Prime Day event in mid-October.