Amazon’s Logistics Fine-Tuning Spotlights Last-Mile Focus

For Amazon, the logistics buildout is a work in progress — with incentives in the mix to keep its driver base growing into the all-important holiday shopping season.

We’re referring, of course, to the announcement of two new value-added services to add benefits for delivery service partners (DSPs), including a boost in pay and new benefits programs. Those programs include a 401(k) program that helps small business owners match employee contributions.

Increasing the pay of those drivers is a way to ensure that Amazon has enough “wheels on the street” headed into the all-important holiday shopping season, which we all know does not exactly conform to the Thanksgiving to Christmas timeframe anymore.

The goods that are headed to the warehouses and to the distribution centers, after all, have to make it into consumers’ hands — and competition for drivers will only get more intense.

Amazon’s actions come as eCommerce growth slows.

Now: Growth is still growth, but the Amazons and the Walmarts and the Targets of the world — the giants that are increasingly straddling online and offline commerce — the key competitiveness boils down to speed.

And speed boils down to having more proximity to the last mile traversed to the end customer’s dwelling. Last week’s reports on Amazon’s logistics plans stated that the company still will move forward to open more distribution centers, where goods are in turn brought to last-mile facilities.

And separately, late last month, Amazon announced that, through Amazon Warehousing & Distribution, it would enable sellers to use “new, purpose-built facilities” for bulk inventory storage and automated distribution. There will be more detail this week as Amazon holds its annual seller conference, but in terms of mechanics, the company has said that “with one click sellers can send their inventory to Amazon Distribution Centers and significantly reduce storage costs.”

Given the roughly 370 million square feet of space owned by Amazon, the footprint is there — the flexibility in how it can use that footprint is illustrated in the new seller initiative. It’s a B2B offering that in turn can help ensure that sellers stay on the platform.

The commerce giant has shuttered or delayed the opening of as many as 66 facilities, including delivery stations and fulfillment centers.

Read Also: Report: Amazon Shuts, Delays Some Facilities as eCommerce Growth Slows

In part that’s due to the consolidation of some operations, and the company has maintained that it also is enhancing some facilities and will look to open new sites. At this point, the net effect has yet to be disclosed, but the initiatives show that Amazon will look to do more with the space on hand, be judicious with the space it adds — and the last mile may guide those efforts accordingly.