(Image source: Supply Chain Dive)
The pandemic posed a challenge to e-commerce businesses as they struggled to maintain standard delivery expectations. In 2020, Amazon scaled up its fulfillment and logistics network by 50% in an attempt to secure the return of one-day shipping in some areas.
The capacity expansion gives Amazon more control over shipping speed since most of the packages are delivered through its internal network: Amazon Logistics. The upgrade frees Amazon from relying on their third-party transportation partners, who are also overwhelmed by high demand for shipment. However, they did not deny the importance of the partners like the U.S Postal Service.
In the last Quarter of 2020, the investment of Amazon for logistics rose by over 50%. With the increase in capacity, the e-commerce giant would need to expand its manpower.
“We welcomed nearly 175,000 new full and part-time employees in Q4 alone,” Olsavsky said.
Amazon wasn’t the only one whose transportation network was affected by Covid-19. In 2019, there were 3 major retailers that offered one-day shipping. It is down to none in 2020, according to the study on 116 retailers by Accenture.