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Amazon Ramps Up Vans Order for Last-Mile Delivery Program

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Amazon AMZN is ramping up its delivery efforts. Reportedly, the e-commerce giant ordered 20,000 Mercedes-Benz vans to support its delivery service program “last-mile.”

The company, which initially planned to order 4,500 vans after its first announcement in June this year, more than quadrupled its order after receiving encouraging response from entrepreneurs.

Notably, Amazon has invited entrepreneurs interested in being part of the company’s “last-mile” delivery program, which is set to pick up deliveries from 75 supplier centers around the United States.

Moreover, the e-commerce giant is set to offer deep discounts on the trucks, uniforms along with training to the team to deliver great value to businesses and customers alike.

Amazon, which currently partners with United Parcel Service UPS, FedEx FDX and U.S. Postal Service for delivery services, also launched Seller Flex earlier this year in the United States to support growing demand for its services.

Extending the Prime Advantage

Amazon has been making efforts to boost its delivery system, especially after one of its major competitors Walmart WMT took steps to improve its same-day and last-mile deliveries.

Given increasing engagement of Prime customers, the company is leaving no stone unturned to ensure that their requirements are met. From the span of a day to two hours, two hours to 15 minutes and 15 minutes to two minutes, Amazon has been cutting down on its delivery time for Prime members.

Notably, Prime members are much more loyal and spend double the amount spent by non-Prime members.

Amazon is known to take bold steps to get an edge in the logistics business. This is evident from the company’s efforts to use air cargo hubs and drones to deliver products to its customers.

Amazon.com, Inc. Revenue (TTM)

Amazon.com, Inc. Revenue (TTM) | Amazon.com, Inc. Quote

How a Separate Delivery System is Beneficial?

Amazon, which relies on many third-party providers to deliver products, is increasingly trying to control the delivery chain to gain greater flexibility over its inventory management and supply chain routes.

This will help it reduce congestion of its own warehouses (by avoiding merchandise of outside sellers), make deliveries quicker and impress shoppers by better managing last mile deliveries and last-minute holiday orders.

Additionally, the company can also reduce its increasing shipping costs, which will eventually add to the bottom line.

Moreover, with the new delivery service in place, Amazon can provide many customized services in addition to helping customers easily track their packages.

Therefore, we believe that this Zacks Rank #2 (Buy) company is moving in the right direction by gaining control over its delivery services network, the demand for which is expected to grow going forward.

You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

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