Amazon and logistics integration

Enrique Dans
Enrique Dans

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There are strong indications that Amazon could finally be embarking on a process of logistics integration through a program to create a distribution force with partners: small companies that Amazon would help create and that would work exclusively to deliver the company’s products. The thinking behind the initiative is clear: the vast majority of complaints the company receives are due to problems with outsourced courier companies.

For large logistics operators, Amazon is a tough customer: it offers incomparably high volumes, but it is also extremely aggressive in terms of price and service, and at times is hugely demanding, often putting courier companies under pressure as they attempt to meet Amazon’s deadlines without losing money. This type of pressure can be handled in short bursts, but is unsustainable day after day, with late deliveries or customers forced to stay at home for hours waiting for their goods. Hence the constant complaints to Amazon, not to its logistics partners, which the company tries to deal with, in many cases offering compensation or additional shipments, which over time can bite into tight profit margins.

Amazon’s problems with its logistics partners were further complicated last May in the United States, when Donald Trump, attacked Amazon in a series of tweets, blaming it for the losses of the US Mail (when the reality is exactly the…

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Enrique Dans
Enrique Dans

Professor of Innovation at IE Business School and blogger (in English here and in Spanish at enriquedans.com)