Amazon Orders 20,000 Mercedes Benz Vans To Expand Delivery Fleet
Amazon announced on Wednesday (Sept. 5) that it is ordering 20,000 Mercedes Benz vans to expand its delivery fleet.
According to The Wall Street Journal, citing Amazon, the vans will also be used for small businesses to carry an excess supply of packages. Judging by the orders for the vans, the company expects 500 or more delivery companies to join its program.
A spokeswoman for the eCommerce giant said it receives “tens of thousands” of applications for its delivery program and is in the process of evaluating them. Amazon won’t own any of the trucks, but would rather give them to fleet management companies that purchase the vehicles and lease them to small delivery companies. The aim is to better control the last mile of delivery, which WSJ reported is typically the priciest part of an online purchase’s journey.
In late June, Reuters reported that Amazon said it wanted to lease vans with the Prime logo on them to delivery businesses, offering what it claimed to be attractive terms. Amazon would provide the businesses with uniforms, fuel and insurance plans for fleet operations and also offer training on taxes, payroll and other small business topics. The branded vans would only be used for Amazon deliveries. Qualified entrepreneurs can launch a delivery business with Amazon for just $10,000, although that doesn’t include any costs associated with hiring drivers, noted Reuters.
“A 40-vehicle fleet could earn as much as $300,000 a year in profits,” said Dave Clark, Amazon’s senior vice president of worldwide operations. He noted that Amazon expects that an operator with 20 to 40 vans would have to hire 100 drivers. Details about the incentives were not disclosed.
As for Amazon’s Flex program, in which drivers get paid to deliver products using their own cars, Clark said it will continue, but doesn’t solve all of Amazon’s last-mile delivery headaches. “Flex is all about leveraging available capacity,” he said, noting that adding new delivery operators into the mix will greatly increase its scale. “We looked at our history with small business (on its platform), and we said we can do the same thing in [the] last mile and people can own a manageable-sized business.”
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