Amazon said to be testing its own shipping network
Going up against the likes of UPS and FedEx, the Internet retailer is reportedly looking to boost its delivery game.
Amazon appears to be aiming for delivery domination. In addition to fresh grocery and dry goods deliveries, and even possible deliveries by drone, the world's largest Internet retailer is now reportedly testing its own shipping network, according to The Wall Street Journal.
Going up against giants like UPS and FedEx, Amazon is reportedly looking to take over the delivery of items in the final segment of the shipping journey, or the "last mile," according to the Journal. The company is also said to be working to deliver goods to customers the same day they're purchased.
"Amazon is growing at a faster speed than UPS and FedEx, who are responsible for shipping the majority of our packages," Amazon wrote in a recent job posting on its Web site, according to the Journal. "At this rate Amazon cannot continue to rely solely on the solutions provided through traditional logistics providers. To do so will limit our growth, increase costs and impede innovation in delivery capabilities... Last Mile is the solution to this. It is a program which is going to revolutionize how shipments are delivered to millions of customers."
Amazon has been apparently testing this delivery service in San Francisco. Several customers have reported receiving packages labeled "AMZL" and "AMZN_US," which are allegedly part of the test project, according to the Journal. The company has also begun openly testing a delivery network in the UK that deals with last-mile deliveries.
Part of the reason why Amazon may be looking to create its own service is because of rising shipping prices and slowed deliveries. Over the holidays last year, Amazon blamed UPS for shipping delays. And, the company has also raised its Prime prices partially because of heightened shipping costs.
During Amazon's first-quarter earnings call on Thursday, Chief Financial Officer Tom Szkutak danced around the question of the company possibly bringing more fulfillment services in-house.
"There's not a lot I can comment on in terms of your specific question," he said. "What I would say though is we continue to work to be as we have over the years to become closer and closer to customers. And so we've certainly done that in a number of different ways. Just the footprint we have from a fulfillment capacity standpoint enables us to be closer to customers and getting great selection even closer to customers."
While a move toward creating its own delivery service could cut costs for Amazon, it could also give the company one more tool to lure customers away from brick-and-mortar stores and onto its Web site.