Amazon has used drivers from UPS, FedEx, USPS, third-party couriers, and other services — including its Uber-like platform Amazon Flex — to help deliver packages to customers. But never has the company actually hired its own employees for the “last mile” of deliveries — until now.
For the first time, Amazon is directly hiring drivers itself as the tech giant continues to expand its delivery infrastructure. The company plans to hire thousands of full-time seasonal employees across the U.S. to deliver packages from fulfillment centers to customer doors this holiday season. Business Insider first reported the news and an Amazon spokesperson confirmed the hiring plan with GeekWire.
The drivers are part of an annual hiring spree Amazon does for the holidays; last year it brought on 120,000 seasonal employees to help inside its fulfillment centers, though that number is being reduced to 100,000 this year reportedly due to reliance on robots, according to Citi analyst Mark May.
Amazon’s drivers will receive the same benefits that other seasonal employees get as part of their temporary employment package. The company declined to offer details about how those benefits compare to full-time employees.
Amazon recently raised its minimum wage to $15 an hour for all employees, including part-time and seasonal workers. A new job posting for a “Seasonal Delivery Associate” in Ohio showed a hourly pay rate of $17.25.
In the past, Amazon relied on third-party providers for costly “last mile” deliveries — those from the warehouse to the customer. But now it is experimenting with new delivery methods.
In 2015, the company launched a program called Amazon Flex, the company’s Uber-like platform that lets everyday people packages with their own cars as contractors. One year later it started experimenting with its own delivery operation. Amazon also last year reportedly tested a service called “Seller Flex” in the U.S. that consists of the company picking up packages sold on its site directly from third-party warehouses.
Earlier this year, Amazon announced the new Amazon Delivery Service Partner program, which lets entrepreneurs start and run their own companies, delivering items purchased on Amazon.com in distinctive blue Prime-branded shirts and vans.
In an odd twist, Amazon is technically now competing with entrepreneurs running Delivery Service Partner operations, at least in terms of hiring drivers.
Amazon is increasingly relying on its own logistics infrastructure as shipping costs continue to spike with growing demand, particularly from Prime members who pay $119 per year for free 2-day shipping and access to Amazon’s 2-hour Prime Now delivery service. The company now has its own truck trailers (7,000) and jumbo jets (40) that shuttle packages to and from 125 fulfillment centers across the world.
Amazon’s shipping costs ballooned to $21.7 billion in 2017, up from $16.2 billion in 2016 and $11.5 billion in 2015. In its annual 10-K SEC filing published this past February, the company said it expects the cost of shipping to continue increasing. Amazon changed its Prime annual membership rate from $99 to $119 this year.
Earlier today Amazon announced that it will offer free holiday shipping to all of its customers on hundreds of millions of items, a potentially costly competitive move designed to keep pace with similar moves by the company’s retail rivals.
Amazon is also testing a new service called Amazon Day, which lets Prime members set a designated drop off day for orders placed throughout the week.
The company’s overall global employment is more than 600,000 people, which also includes its Seattle headquarters, worldwide operations and other employees in addition to its fulfillment network.