Amazon is going to kill UPS, FedEx and USPS

Recent rumors about a possible acquisition of the Silicon Valley start-up Zoox by Amazon, heats up speculation about the plans of the online retail giant. Founded in 2014, the start-up is not only developing technology for autonomous cars, it is also working on a so-called omni-directional vehicle itself.

Of particular interest seems to be Amazon’s interest in autonomous systems. The company has invested $530 million in a competitor of Zoox. Aurora, founded by ex-Waymo development manager Chris Urmson, former head of Tesla autopilot Sterling Anderson, and ex-Uber ATG head Drew Bagnell, develops self-propulsion technology.

Amazon also made further investments in Rivian, a start-up that wants to launch an electric pick-up truck. Amazon also has its own department to develop autonomous systems and is working on the development of autonomous drones and zeppelins as a drone platform.

Once you put these pieces of the puzzle together, and are familiar with the political discussions surrounding the USPS – President Trump, who has been in conflict with the Amazon founder and owner of the Trump-critical Washington Post, Jeff Bezos, so far and has prevented a COVID-19 aid package for the USPS, and criticized its package prices for Amazon – then the long nose of innovation begins here.

Long Nose of Innovation

Amazon has been very aggressive in many of its developments so far and the comparison with another service shows a blueprint for Amazon’s plan. Amazon developed a highly scalable cloud solution for its own online retail site that allowed millions of simultaneous accesses to the site. Instead of standing still at this point and, as is the case in all other industries, operating this IT solution as a cost factor, Amazon opened up a service for others from the cloud solution. With Amazon Web Services AWS, Amazon quickly became the leading cloud provider, hosting Netflix, among others.

Currently, Amazon relies on delivery services such as Post/DHL, UPS FedEx to deliver ordered goods to customers. This is both a cost and time factor. In recent years, Amazon has been moving more and more in the direction of same-day delivery with Prime, among others. During the COVID 19 crisis, Amazon even hired more than 500,000 employees in the US alone to handle the dramatic increase in online orders.

Amazon could reduce costs by developing its own autonomous delivery robots, autonomous delivery vehicles, and autonomous drones, and push delivery from its own distribution centers or partner stores down to a few hours or even under an hour. This would eliminate the need for people in the delivery vehicles, which would also reduce costs. Return shipments could also be made much more user-friendly. Customers would then no longer have to take their parcels to the post office or another delivery service; a robot or drone would pick them up from the customer’s premises.

Amazon would then have an unbeatable delivery service in development that could force any other traditional delivery service out of the lucrative parcel market. The Post Office, UPS or FedEx have neither the financial reserves nor the technology to take this step. Their own processes and the history of the companies prevents them from initiating this disruptive innovation themselves. With this step, Amazon could control the entire supply and warehouse chain and work its way up to become the largest transport service provider the world has ever seen.

However, much depends on how quickly autonomous systems can be reliably developed and approved and integrated into existing transport infrastructure. At the very least, deliveries by drone will probably take a little longer thanks to conservative air traffic control authorities.

This article has also been published in German.

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