Tuesday, November 03, 2020
Amazon reportedly planning new service for rural deliveries, cutting out U.S. Postal Service, which needs its money
Amazon may be looking to handle its own deliveries to rural areas rather than relying on the U.S. Postal Service, Kim Lyons reports for The Verge. "The e-commerce behemoth would rely on shipping hubs in rural areas under a plan called 'wagon wheel,' a reference to Amazon’s hub-and-spoke supply chain. In Amazon’s terminology, a wagon wheel station provides support for smaller shipping facilities."
It's unclear when or where the program would be launched, "but Amazon executives said on the company’s third quarter earnings call last week that it expects to continue putting money into its shipping and delivery infrastructure for years to come," Lyons reports.
The Postal Service received $3.9 billion in revenue from Amazon in fiscal 2019 for delivering 1.54 billion Amazon packages. That's about 30 percent of Amazon's total volume, Lyons reports. Amazon is more likely to rely on USPS for rural deliveries than its own couriers, since such deliveries are more time-consuming and thus less profitable.