Amazon Announces Plans To Change Its Prime Shipping Service To One Day From Two
Amazon Announces To Change Its Prime Shipping Service To One Day From Two
Amazon, the leader in online retail business has decided to change its Shipping services time period for Prime Users to one day from the earlier two day period. Many believe that the move by Amazon to make 1-day shipment a default service for Prime users would have a profound impact on the whole retail market.
In order to scale its production to meet the 1-day shipment deadline, the company needs to boost its aircraft fleet to over 87, and also increase the number of US delivery stations to over 350 from its current 115 existing ones. The current market strategy of Amazon is centered around cities with 250,000 population, however, the firm is planning to shift the focus towards cities with a populations of around 100,000.
Amazon's 1-Day Delivery Can Become A Headache For Other Retailers
Amazon is currently the king in the online retail business with a total market capitalization of well over a trillion US dollar and is already known for its impressive Prime services availing shipment within 2-days of placing the order which is now changed to 1-day. This change can become a headache in the highly competitive online retail business, as online retailers usually take 3-5 days for shipment of the product.
Amazon shares a very healthy and cordial working relationship with UPS, one of Amazon's shipment partner which exclusively handles all Prime Shipments for the retail giants. However, many believe that the recent move by Amazon towards one-day shipment can put a huge load on its partner UPS.
UPS has very recently decided to move towards automating shipping centers which it believes would help them make their automated shipping hubs 35% more efficient than the regular staffed ones. But, analysts are quite skeptical and believes the move by UPS is definitely going to help it scale better, but it is still not enough to fulfill Amazon's 1-day shipment requirements.
Can Shipping Partners Scale Their Infrastructure To Fulfill Amazon's New Policy
Another headache for the shipping partners due to the newly announced policy could be scaling of infrastructure, where it may not be possible to meet the demands of the consumers with the current ones. UPS has looked towards blockchain in the past, and has been trying to incorporate blockchain technology in order to streamline the workflow and automate the services.
However, the firm's execution of its ambitious plans still requires some attention and it is currently only used for B2B services. The current system is well-developed enough to help it meet the demands of the new one-day shipment policy by the Amazon. So, for the time being, UPS needs to develop its automated shipping hubs so that it can handle the pressure of reduced shipment time.
Amazon Needs To Start Developing Its Own Blockchain Based Shipment Services
Amazon is well versed with the importance of Distributed Ledger Technology and has invested heavily towards providing blockchain as a service in the future. However, the current situation highlights the need for the retail giants to start working towards a decentralized supply-demand chain for its shipment needs. The online market place can take a cue from IBM who has run several pilot projects recently related to the supply-demand chain and have been quite successful at it.
The latest policy announcement of decreasing shipment time from two days to one could be a piece of news to rejoice for the Prime subscribers, however, the move can really put an intense pressure on the firm as well as its shipping partners as the infrastructure that they possess currently cannot handle such a massive change. However, Amazon being the retail giants that they are, they must have some working plans behind it before making the announcement.