For years critics have complained that Amazon has put large numbers of businesses, mostly retailers, out of business, as it grabbed market share with its low prices and fast delivery.
Supply Chain Digest Says...
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Walmart also has been rolling out a service called GoLocal that delivers packages for other retailers “anywhere in the US” through third-party delivery firms |
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Is the United States Postal Service (USPS) going to face similar risks from being “Amazoned?”
That just may be, according to an article this week in the Walsh Street Journal and reporter Sebastian Herrera, which says that Amazon “is reaching into the remote corners of America to deliver its packages quicker to customers in rural areas, a push that represents its last frontier of ultrafast delivery in the US.
Until now, the article notes, customers in small towns get deliveries primarily from the postal service, which has a mandate to deliver to all addresses in the country. But increasingly, they are receiving Amazon packages faster than USPS deliveries - and thus Amazon is taking market share.
In fact, in the past few years, Amazon been quietly building out its network to serve more rural areas, including hyper-efficient warehouses, contracted drivers and mom-and-pop shops, the article says.
Why the focus on this market by Amazon? The Journal says that the company “is seeing demand in more remote pockets of the country and betting that offering faster delivery to rural customers increases the rate at which they purchase items. By increasing its volume, it can offset the higher delivery costs with the fees it charges its sellers.”
This in the context of Amazon’s stated goal of delivering itself 90% of the parcels it ships. To get there from the two-thirds or so it delivers today may require opening new markets such as rural America.
Maya Vautier, an Amazon spokeswoman, told the Journal that expanding the rural delivery network “will help cut delivery times for customers in smaller towns and more isolated parts of the country.”
Despite Amazon’s aggressive moves, a USPS spokesperson says it isn’t worried about the competition. The spokesperson noted that the postal service’s infrastructure enables daily package delivery to every address at an affordable rate that competitors would be hard-pressed to match.
However, Amazon says that believes it can deliver its packages more efficiently than the USPS, it will do so.
The article notes that as Amazon has expanded further into rural areas, the USPS has extended delivery times for mail under a current restructuring program.
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 Of course, Amazon rival Walmart has thousands of retail stores in rural areas, which it increasingly uses to fulfill ecommerce orders. Walmart also has been rolling out a service called GoLocal that delivers packages for other retailers “anywhere in the US” through third-party delivery firms.
Which is likely in part behind Amazon’s rural strategy, which for example involves cities such as Duluth, MN, where it plans to open its first delivery site in an industrial park area where once sat a large steel plant.
Estimates are that the USPS currently delivers about 8% of Amazon parcel deliveries - many of them to rural areas.
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