I wouldn't be surprised to see more of the major logistics providers shift away from Amazon or outright break up with them like FedEx did. Amazon packages are among the least profitable packages UPS and FedEx can deliver and, in general, their B2C business isn't whats making them their best money. Up until 5 or 6 years ago, I believe their volume and sales mixes were more than half B2B; e-commerce has been shifting that and driving down overall margins.
Shippers have tried to combat this trend by completely changing their pricing model to Dimensional Weight Pricing. Dim Weight pricing was introduced 5 years ago. Whereas prices were charged on a pure weight basis, now they're charged based on the volume package too. This makes 100% sense if you've ever received an Amazon package with those giant air package puffs. Those air packets take up a lot of volume in planes and trucks that could otherwise be filled with additional packages if boxes were rightsized to their contents. The hope by UPS and FedEx is that this new pricing scheme would push Amazon to change how it packaged items, allowing UPS and FedEx to deliver more packages per plane/truck, etc and ultimately improving B2C margins.
It's helped to some degree but has also contributed to driver fatigue (as DevilWin notes). Whereas in the past you might have had 60-90 stops/per truck on an average day, now that average is a good bit higher because due to Dim Weight Pricing you can fit more packages on each truck. It makes great economic and shareholder value sense but creates additional stress on the folks actually doing the work --- the driver.
And the truth shall set you free. I really didn't mean to come down hard on the customers. But the stress spoken of is very real. Hiring more drivers is the key, but this takes time. In the meantime, a ton of great drivers are leaving, so it's a vicious cycle.And it's not just us, USPS and UPS are also losing drivers at an unprecedented rate.
Yeah, that still makes Amazon the largest customer of UPS and Fedex. I believe Amazon accounts for 12ish percent of global e-commerce revenue...more in the US. B2B shipping accounts for near or more than half of UPS and Fedex’s respective revenues. The USPS is still the lowest cost option and HAS to deliver everywhere in the US so UPSand Fedex frequently have deals in place with them for “last mile” shipping to locations where it’s unprofitable for them to have delivery coverage. You start chunking it out and it makes sense. Amazon’s share of global e-commerce is growing so it stands to reason that their revenue percentage will as well for the big shippers. On the other hand, they dont want too much revenue at risk to a single customer.
Tough times for ground shipping in general:
http://www.msn.com/en-us/money/compa...b7Kz&ocid=iehp
Yesterday I got a call from an irate customer claiming our driver would not get out of her van to deliver the package. She claims she has two large dogs but they were friendly. So, being bored, I went to meet "E" and find out for myself what was going on. We drove back to the location, and were greeted by two large and very aggressive acting German shepherds. The lady came out on her porch, and made no attempt to restrain her dogs, just stood there watching us. I asked her if these were her dogs, she replied yes but they would not bite. I started to get out, and the dogs growled and made a charge in my direction, so I jumped back into the van. I asked her to come to the van and retrieve her box, which we had in the van cab. She made a look of disgust but came and got her package.
Called us cowardly as we drove off..Unreal. Should have let the dog bite me then sued her sorry you know what..
Way back when, in the dark ages before leash laws, there were a bunch of really friendly dogs in our neighborhood. Friendly to everyone but the UPS driver, who used to throw rocks at them to keep them away.
Naturally, every time his truck came down the road, the dogs got riled...
-jk
I guess it's poor form to quote yourself but here's a little bit more on FedEx's decision to stop shipping certain of Amazon's business. It's not profitable revenue. UPS has the same problem.
The money quote: Amazon made up some 1.3% of FedEx's 2018 revenue. Donald Broughton, the founder and managing partner of Broughton Capital, told Business Insider the operating profit from that revenue was under 0.25% — "something between tiny and zero."
My dog loves our UPS driver. Every time the truck pulls up, she runs over and gets treats from him! She recognizes the truck, stays patient until he wants to give her a milk bone. Good dude this driver.
~rthomas
When I was on the route, I always gave Milkbone treats. Most dogs were good, but I have had them eat the treat then try to have me for dessert..