Computer Business Review

Amazon set to launch local delivery service

by Michael Moore| 25 April 2014

Looking to take on likes of UPS and DHL with ‘Last Mile’ deliveries.

Amazon plans to launch a local delivery service, meaning customers will receive their products faster than ever before.

According to the Wall Street Journal, the company is currently trialling its 'Last Mile' delivery service around San Francisco, Los Angeles and New York, using Amazon-supervised contractors driving lorries stocked with the company's products.

The new service will effectively cut out the middleman in Amazon's delivery process, as it uses existing companies to transport its products to customers, meaning it will be directly competing with specialists such as UPS and DHL.

Such a move would also allow the company to provide a same-day delivery service, the holy grail for many online companies. Having its own logistics service would also mean Amazon could provide deliveries at specific times, such as in the evening or at weekends.

The new service would also allow Amazon to cut its shipping costs, which have become a significant expense for the company, rising 31% in the previous quarter according to its most recent financial results, released last night.

The US trials follow a test of delivery network carried out in the UK, recently hailed by AmazoncChief executive Jeff Bezos. "We've created our own fast, last-mile delivery networks in the UK, where commercial carriers couldn't support our peak volumes," Bezos told shareholders earlier this month. "There is more invention to come."

News of the delivery network first came in a recent job posting on Amazon's website. "Amazon is growing at a faster speed than UPS and FedEx, who are responsible for shipping the majority of our packages," the posting read.

"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."

Earlier this week, the company also announced it was launching a grocery delivery service for its Prime customers, delivering up to 45lbs of selected items for $5.99. The new Prime Pantry service will allow Prime users to order canned foods, cereal, snacks, beverages, groceries, and household items.

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