Amazon on-time deliveries slip as record Cyber Monday strains system

  • Amazon
  • Thursday, 12 Dec 2019

Amazon van drivers delivered 93.7% of US packages on time during Cyber Monday week, down from 98.2% during the prior week that included Thanksgiving, ShipMatrix said. — Reuters

On-time delivery rates fell for Inc van drivers during the week ended Dec 7, when the world's top online retailer was slammed with record Cyber Monday orders and regional winter storms, consulting firm ShipMatrix said on Dec 11.

Amazon van drivers delivered 93.7% of US packages on time during Cyber Monday week, down from 98.2% during the prior week that included Thanksgiving, ShipMatrix said.

This holiday season is a crucial test for Amazon's in-house delivery operations. The season is the shortest since 2013 and retailers are racing to secure sales with speedier delivery and other promotions. rolled out one-day shipping in April. A few months later, FedEx Corp cancelled its air and home delivery agreement with online retailer.

Amazon van drivers handle the lion's share of Amazon's own deliveries, which often originate from local hubs in primarily urban areas. They are expected to drop off roughly 275 million packages between Thanksgiving and Christmas, more than double last year's number, according to ShipMatrix.

Small margin for error

Amazon did not immediately comment on the holiday performance of the drivers.

For months, analysts have warned that Amazon's decision to accelerate delivery speeds just months before the busiest time of the year would dial up pressure on the company.

"The more you ratchet down (delivery) time frames, the less margin you have for error," said Evan Armstrong, president of supply chain consulting firm Armstrong & Associates.

Many Amazon shoppers pay US$119 (RM495) a year for "free" one- and two-day Prime shipping.

"As a customer, it doesn't matter. If you ordered on Amazon and it's late, Amazon's going to get the blame," said Cathy Morrow Roberson, founder of consulting firm Logistics Trends & Insights. "I don't think this year people are going to be as forgiving as in the past."

Prime customer disappointed

Lacheal Wright waited eight days for the Vtech writing tablet, Nerf toys and hard-to-find Bumblebee Transformer figure she ordered from Amazon on Cyber Monday. Those Christmas gifts for her son were originally slated for delivery on Dec 5 but arrived Dec 10.

Wright, 37, whose home in Cincinnati is 20 minutes from two Amazon warehouses, said she had been looking all over for the Bumblebee Transformer and said that was the only reason she did not cancel the entire order. Now that it has arrived, she plans to cancel Prime.

"I pay for Prime. I expect it on time," Wright said.

Amazon's logistics unit in just a few short years has built a US network with hundreds of facilities, nearly 50 leased airplanes and some 30,000 delivery vans.

"Since Amazon is a retailer, fulfilment company and delivery carrier (all-in-one) ... delays could be resulting from delays in the fulfilment of the order," ShipMatrix President Satish Jindel said.

The drivers who work for companies that deliver exclusively for Amazon did have a better on-time rate than other carriers. Cyber Monday week results were 92.7% for United Parcel Service Inc, 90.4% for FedEx Corp and 92.3% for the US Postal Service.

UPS, USPS and other nation-wide carriers are expected to deliver another 180 million Amazon packages during the holiday season, according to ShipMatrix, which has been using proprietary software to track on-time deliveries since 2013.

Many of those deliveries are to smaller cities, towns and rural areas, which are more difficult than drop-offs in densely populated cities.

In 2013 an unexpected surge in Amazon packages swamped shippers, delayed gifts and prompted the Seattle company to take control of delivering merchandise to people's homes. – Reuters

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