Amazon is expanding its delivery network by partnering with small businesses across 23 states in the United States to complete shipments to customers. This new initiative, called Amazon Hub Delivery, aims to improve the reliability of last-mile deliveries by utilizing secure storage areas at local businesses. Amazon’s program is open to a wide range of business types, including bodegas, coffee shops, florists, and more.
The concept of utilizing local businesses for deliveries is not new for Amazon. The company first introduced the “I Have Space” program in India back in 2015, which later expanded to Japan and Spain. In late 2020, Amazon launched a pilot program in the United States, focusing on enhancing delivery services in rural areas. The current expansion covers over 20 major cities, including Los Angeles, New York City, and Boston.
There are clear incentives for both Amazon and the small business partners. By leveraging small businesses, Amazon can enhance the reliability of its deliveries while also reducing costs associated with last-mile logistics. Beryl Tomay, Amazon’s Vice President, highlights that partnering businesses can grow their operations and supplement their income through this program. According to Axios, Amazon is estimated to pay around $2.50 per package, resulting in an average earning of $27,000 per year for small business partners. Amazon aims to collaborate with 2,500 small business drivers by the end of 2023.
This strategy comes at a time when Amazon has faced challenges such as mass layoffs due to economic factors and the recovery from the COVID-19 pandemic. It also aligns with efforts to address labor disputes that have arisen, including allegations of misusing tips from Flex drivers. By involving small business partners for deliveries, Amazon can reduce potential labor disputes that may arise from using its own workforce for shipping. However, Amazon remains committed to purchasing 100,000 Rivian delivery vans to further support its delivery operations.
With Amazon Hub Delivery, the e-commerce giant aims to optimize its delivery capabilities, provide more reliable service to customers, and support local businesses. As the program expands across the United States, it will be interesting to see how it shapes the future of last-mile logistics and the relationship between Amazon and its small business partners.
