Why Amazon is More Efficient at Delivery Compared to USPS and UPS

Amazon Flex - delivering Prime packages
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It's been in the news for awhile now that Amazon has started the process to create their own delivery service, cutting out middlemen such as USPS, UPS and FedEx. Now that I've watched an eye opening YouTube video on Amazon Flex, I'm confident that the process Amazon has created for their own last mile delivery service will succeed.

Watch the video by CNBC called What It's Like To Be An Amazon Flex Delivery Driver, which gives a perspective of Amazon Flex from viewpoint of the Flex driver. It's brutal for the driver and there is room for improvement for the service, such as time for breaks. But the reality is it very closely resembles the early stages of Uber and Lyft. Flex drivers are contractors, who are choose their own working hours and maintain their own vehicles. So like Uber and Lyft, except instead of driving passengers, Flex drivers deliver packages.

From a personal experience as a customer of Amazon with Prime, I've had several packages delivered to my house. My security camera caught Amazon Flex driver delivering packages exactly like the YouTube video described. Luckily the street I live on has low traffic, but the video clearly showed the Flex driver running across the street with not just my package, but also the package of a neighbor across the street. Based on this one encounter, Amazon Flex delivers much more effectively than delivery drivers from UPS or USPS. However, I also agree the delivery process is unsafe, as running (especially across the street) can result in car accidents or sprained ankles.

The speed efficiency that Amazon has created in my opinion is challenging for large traditional shipping companies to match without upsetting their existing delivery drivers. UPS is a $88 billion company and FedEx is a $44 billion company (as of July 11, 2019). Since USPS is a government entity and not publicly traded, has an unknown market cap. But as Amazon slowly erodes the services from UPS, FedEx, and USPS, my prediction for is that Amazon will continue to grow.

Therefore, from my observations, I will continue to hold my shares in AMZN. I still think there is plenty of room for Amazon to take market share from other delivery companies.

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