The future of Amazon is hiding in plain sight in a San Francisco parking lot.
There, adjacent to recently closed Candlestick Park, Amazon is testing its own delivery network for "the last mile," the final leg of a package's journey to consumers' doorsteps. Trucks loaded with Amazon packages and driven by Amazon-supervised contractors leave this parking lot for homes and offices around San Francisco. Similar efforts are under way in Los Angeles and New York.
There's no solid info on just how long Amazon has been running this test, but if I had to guess I would bet that Amazon's been building towards this moment for at least 7 years. I first saw a courier drop off and pick up an Amazon order back in 2007, and I have had couriers deliver packages once or twice since then.
But Amazon's current efforts are a lot larger than simply hiring couriers. Amazon is not just running a pilot; they're also reportedly looking for space to rent/buy where they can put a truck maintenance facility to replace their more current ad hoc efforts.
At their pilot facility near Candlestick Park, tractor trailers carrying a load of packages from Amazon's distribution center pull up between pairs of Amazon Fresh trucks and Ryder trucks so packages can be transferred:
A permanent facility would allow packages to be transferred faster and from a single incoming trailer to a larger number of local vans.
And not only is Amazon looking to build or buy a facility, they are also hiring new managers for a service called "Last Mile":
Amazon is growing at a faster speed than UPS and Fedex, who are responsible for shipping majority of our packages. At this rate Amazon cannot continue to rely solely on the solutions provided through traditional logistics providers. To do so will limit our growth, increase costs and impede innovation in delivery capabilities. Last Mile is the solution to this. It is a program which is going to revolutionize how shipments are delivered to millions of customers.
But even that comes as no surprise. Amazon showed their interest in owning their own delivery service when they bought a stake in Yodl, the UK delivery service, last month. As I said at the time:
Even if Amazon doesn’t buy Yodel outright, I still think this deal is a sign that Amazon is going to launch their own shipping service. The retailer has long since grown past the point where it made business sense for Amazon to build and manage their own warehouses, and I think they could be at the point where they are shipping so many items every day that owning their own delivery service could reduce their costs and improve their customer service.