Amazon has announced it will be upping its 2-day shipping standard for Prime users to 1-day shipping. The move will have a profound impact on the entire retail market.
1-day shipping will soon be the default for all Prime users, according to an update made by Amazon recently.
The move will require a complete logistical overhaul for the company, requiring boosting its delivery aircraft fleet to as many as 87. Over 350 U.S. delivery stations will also be needed — a vast improvement over the 115 Amazon currently operates. Additionally, rather than mainly focusing on cities with over 250,000 people, Amazon will push harder into markets with populations of 100,000 people.
SponsoredFor Amazon’s retail competitors, Amazon’s new 1-day shipping offer is a nightmare of extreme proportions. This all comes at a time when the retail industry was just beginning to catch up with Amazon.
Amazon and UPS have a special relationship, as the shipping giant exclusively handles all Prime orders.
However, the move towards 1-day shipping would put an unprecedented strain on UPS’s existing hubs. There’s the question of whether UPS’s current initiative towards automating shipping centers can keep up. Currently, UPS is aiming to make its automated hubs 35 percent more efficient over its regularly-staffed ones, but even these projections don’t add up to the increases expected from Amazon’s new policy.
There are also questions surrounding the infrastructure required for these new automated hubs. UPS has been looking over blockchain technology in the past few years and realizing its potential in standardizing and automating its services. however, the idea is still poorly developed within the company. Mainly used for B2B sales, the UPS’s current blockchain-based systems are not ready for Amazon’s massive push.
Therefore, UPS will have to accelerate the development of its automated hubs to cater to Amazon’s new 1-day shipping policy. Yet, the shipping giant may find that it will experience unexpected limitations until it standardizes its own trustless distributed ledger system (i.e blockchain). Until then, it will be forced to employ its existing centralized services and hope it can hold up to Amazon’s growing demand.
Do you think UPS’s centralized, automated shipping hubs can handle Amazon’s 1-day delivery? Let us know your thoughts in the comments below.
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