Discussion Board Post 1
Brett Y.
Amazon
How is Amazon taking the current transportation climate into its own hands?
At the height of the pandemic, most of America was under lockdown. Businesses were closed and people were out of work. Shopping was hard because stores were only open short hours. Even when they were open, the shelves were usually bare of essentials like cleaning supplies and toiletry items. As a result, America turned to Amazon as 24/7 shopping center. Amazon had been started self-delivering packages in 2005, and has been growing its delivery service steadily since then. With the 2020 Christmas season approaching, Amazon hired an additional 400,000 employees to pick, pack, ship and deliver customer orders. “Amazon used the crisis, when prices on everything from commercial real estate to cargo jets plummeted, to amass an empire already beginning to rival the U.S. operations of United Parcel Service and FedEx” (Greene, 2020). Having its own shipping network gave Amazon a huge competitive advantage over its e-commerce competitors.
Will Amazon encounter similar industry issues like the shortage of drivers, ship and port capacity, labor disputes, and increased regulations?
Yes. As any business grows, it assumes the same liabilities as its larger competitors. The solution is to be proactive and prepare for those issues before they occur. There is not much that Amazon can do about the international shipping congestion, but they can mitigate some of the other issues by paying competitive wages and treating their employees well. Amazon also makes extensive use of what they call “Flex” drivers (https://flex.amazon.com/), who are independent contractors similar to Uber drivers. This helps them to avoid a lot of driver issues faced by the competition.
Is Amazon biting off more than they can chew?
No. Amazon started delivering their own orders as a way to save money. They have managed to grow to a point where they have surpassed FedEx, and are quickly gaining on UPS and the USPS. Amazon has smartly focused on self-delivery in locations where it makes sense, and hiring competitors to deliver in low-density areas where a shipper can actually lose money. In the UK, Amazon is already test-marketing a dedicated shipping service to directly compete with UPS and FedEx.
Will this add significant operational costs?
Yes. When Amazon starts operating as a true commercial freight company, they will add additional overhead and most likely need to make additional investments to their delivery operations. Fortunately, Amazon is so huge, it should have no issues funding the project.
Greene, J. (2020, November, 27). Amazon’s big holiday shopping advantage: An in-house shipping network swollen by pandemic-fueled growth. The Washington Post. Retrieved from https://www.washingtonpost.com/technology/2020/11/27/amazon-shipping-competitive-threat/
Discussion Board Post 2
Devin J
How is Amazon taking the current transportation climate into its own hands?
Amazon is a very big company that you can see everyday in delivering your packages like other industries out there. However, Amazon has a big main focus right now and that’s on the climate Change. Amazon wants to reduce the carbon emission that it produces by its own vehicles and factories. They just don’t want to reduce their emission but want it to be a zero sometime in the future and the first way that they are doing this is by transferring over to all electric vehicles.
Will Amazon encounter similar industry issues like the shortage of drivers, ship and port capacity, labor disputes, and increased regulations?
I believe that amazon will grow on managing how resources are acquired, stored, and transported to their final destination which in doing so they then will become a package delivery service that will have competition with its other opponents which included Fed Ex, UPS, and USPS. Also, I think that they will face many challenges as well like their opponents but, I also think they are better prepared then their competition as they already have a lot of structure and money to start off with as well warehouses
Is Amazon biting off more than they can chew?
I would have to say no that Amazon is biting more than they can chew. The reason is that they have been making plans to do this for a long time since shipping was costing so much so they planned to get into that business so that they could grow there company even more.
Will this add significant operational costs?
Yes, I think this will add significant operational costs. The reasons are that since it will be new, they will have to put a lot of money toward it so that they can make sure it does not fail and succeeds for them but after that I would say the operational costs will go down.
References
Bloomberg. (n.d.). Bloomberg.com. Retrieved May 11, 2022, from https://www.bloomberg.com/news/features/2020-09-21/amazon-made-a-climate-promise-without-a-plan-to-cut-emissions