Regardless of how you feel about Amazon.com, there is one thing you can’t deny: The company has forever changed the landscape of shipping customer goods. Prior to Amazon’s 2-day shipping option, truckers and shippers only had to consider the weight of things. Now there’s an environment of ever-changing variables that affects shipping, courtesy of Amazon. A few of the most prominent ways Amazon has changed the face of shipping includes:
Size Matters in Shipping
Amazon will ship anything from a single tube of lip gloss, to a 72 inch flat-screen TV. As Amazon began offering free shipping for just about anything, thousands of small packages filled with single razors and super light ear buds began flooding the shipping routes. For carriers, these tiny packages and often unpredictable sets of items presented a problem.
Prior to the Amazon effect, carriers charged by weight. With the influx of smaller shipments, many truckers were wasting expensive fuel on super-light loads. To balance the damage, the American Trucking Association did two things: increased the tonnage index to record highs and made dimensional weight, which factors in the width and height of a package, an industrywide practice. Find out more about Dimensional Weight Pricing (commonly known as DIM Pricing) here.
More Carriers on the Road
The Amazon effect has put more truckers on the road in the last 5 years than any other single source. In fact, the US Department of Transportation has stated that online shopping will become a majority in the 29 billion tons of freight that is projected to be delivered every year by 2040. For FTL and LTL carriers, this means more work, and also, more competition.
Freight companies that are wishing to stay in the game are going to have to offer competitive rates and excellent delivery times in order to keep up with online shopping demands. Also, as the demand for LTL carriers grows, truckers can expect to make a few more demands on companies wishing to hire. Truck driver employment is expected to grow by 11 percent from now until 2022. For companies wishing to hire excellent and reliable drivers, they are going to have to start offering pay and benefits that others can’t match.
The Appearance of Nontraditional Carriers
Remember when receiving a doorstep delivery was close to impossible on a Sunday? Well, not anymore. Amazon now promises quick deliveries even on nontraditional delivery days. To compensate for this influx in deliveries, nontraditional carriers have popped up all over to fill a niche market. While LTL carriers aren’t being highly affected by these nontraditional and smaller carriers, these up-and-comers do create the potential for market conflict. Even companies like UBER are hopping on the small carrier bandwagon to finish deliveries where FTL and LTL leave off.
The Rise of Drones
Although shipping with drones hasn’t become a delivery staple nationwide, there is a good chance that the regular use of drones isn’t too far off in the future – especially since Amazon has taken such an interest in them. For carriers, this either means employing their own fleet of drones or missing out on an opportunity. While drones will most likely pick up where the current market lacks (delivering on holidays, to remote areas, etc.), there is still a chance that drone delivery could pull some business away from current carriers. Right now, however, the limitations of technology and regulations have prevented drones from being fully integrated.
Amazon has, and will continue to, influence the industries of shipping and logistics. For companies specializing in these fields, they would be wise to use Amazon as a gauge for what they should be doing in order to stay ahead of the market. Don’t shy away from opening an extra route or offering greater benefits to drivers who are willing to drive on nontraditional delivery days. Meeting those extra demands of Amazon may put you in the fast lane of success.
Original Sources for this post can be found here: