Amazon has revived its external packaging shipping service, Amazon Shipping, which it temporarily halted during the Covid-19 pandemic.
This move puts Amazon back in direct competition with FedEx and United Parcel Service (UPS).
The service, now available in the contiguous US, handles packages not only from Amazon’s own website but also from other websites and selling channels.
To qualify for participation, businesses must also sell on Amazon’s platform.
As the pandemic led to a surge in online shopping, Amazon expanded its logistics operations to meet the heightened demand. However, in the subsequent year, they found themselves with excess capacity in their network.
To address this, the company sublet millions of square feet of warehouse space and embarked on a significant overhaul of its delivery systems.
Amazon has been on a quest to enhance delivery speed while also adopting more sustainable practices. The company established more same-day delivery centres, ensuring that orders reach customers within a day or less.
Furthermore, Amazon is actively reimagining its packaging to reduce waste, aligning with customer preferences and climate-related goals.
A rivalry renewed
Once heavily reliant on FedEx and UPS for its delivery services, Amazon gradually built its own extensive shipping network. This network encompasses hundreds of warehouses and an extensive fleet of vans, planes and long-haul trucks.
Amazon introduced the Amazon Shipping service in 2018. A year later, it terminated its shipping contract with FedEx due to increasing competition.
Executives temporarily paused Amazon Shipping during the pandemic’s peak when orders flooded in due to lockdowns. However, they have now reopened the program to sellers, inviting them to take advantage of this shipping option.
Amazon spokeswoman Olivia Connors said: “We’re always working to develop new, innovative ways to support Amazon’s selling partners and Amazon Shipping is another option for shipping packages to customers quickly and cost-effectively. We’re now making it available to more selling partners.”
Logistics continues to be a focal point for Amazon, a priority maintained by Chief Executive Andy Jassy. It remains the engine powering Amazon’s retail business and a critical touchpoint with customers.
Healthy profits reflect a reawakening across various areas
The company has recently doubled down on speed, optimising its logistics division to bring packages closer to customers and establishing more same-day delivery centres, further reducing delivery times.
Amazon’s recent robust earnings report indicates a resurgence across various segments, from online retail to digital advertising. Despite not growing at its previous rate, the company demonstrated a rebound from a period of slower growth and layoffs.
In the second quarter, its revenue surged nearly 11% to $134.2bn, surpassing analyst expectations. Amazon projects a similar pace of expansion for the current quarter, showcasing its enduring strength in the e-commerce sector.
