Shawn Hessinger, Executive Editor Small Business Trends, recently spoke with Brent Leary, Managing Partner at CRM Essentials, about his visit to the Amazon delivery station in Atlanta and the importance small businesses play in the company’s last-mile service.
What is Amazon’s Last Mile Delivery?
First, let’s define what last mile delivery services mean to readers who may not be aware of what it means.
The term refers to one of the last parts of the delivery process. It is when a packet is transported from a transport node to its final destination, or, in the case of the entity to which it is delivered, the addressee. The consignee is usually a retail store or a consumer’s personal home.
So Amazon controls the upstream process of this network until it reaches the node, which is their transport node. Small businesses will enter this part of the network to load and transport the goods to the consignee on this last leg of the journey or “last mile”.
Amazon’s Delivery Station Reveals
Shawn Hessinger: So, Brent, tell us a bit about what you did and how you ended up tracking packages at Amazon.
Brent Leary: I’ve always been fascinated by what they do. I gave them my attention and they invited me to take a look locally and see a behind-the-scenes look at the last mile here locally in the Atlanta metro area.
There I had the chance to do a tour of what they call a drop off station which is one of the facilities along the route to get your stuff to you that, you know, goes from fulfillment center to sorting center to what I went to, which is a delivery station.
And they take those packages and basically prepare them for that last mile delivery by a van, which is performed by delivery service partners. These partners are not Amazon employees; they are small companies that Amazon partners with to deliver your package.
How Small Businesses Are Crucial to the End of the Delivery Process
Shawn Hessinger: So many people talk about Amazon like it’s just a big company. But as we know, there are many third-party sellers. You talked about how you saw in this ecosystem that small businesses are part of this whole process.
Brent Leary: The Atlanta delivery station where I got to see behind the curtain was 250,000 square feet! While there, I saw that there are several components in the process:
First, there is “Under the Roof” where the packages are taken off the trucks and brought under the facility for processing. Once that processing is done, there’s the packing, which they call induction – putting things in packages to ship, put them in a sorting bin, and get them ready for the delivery service partners to come in and take the packages. Finally, the partners put them on their trucks and take them for delivery.
Now, before all that happens, they have fulfillment centers. Sales partners who do fulfillment through Amazon have items that they sell that go to those facilities.
And as soon as someone presses the buy button, it goes from a fulfillment center to a sorting facility. Once it goes from there, it will be delivered to any number of delivery stations. The delivery station processes it to the point where it is ready to be put on a truck. And the truck, at least in the case where I was, has seven delivery service partners that Amazon and this facility work with.
Each of those partners has multiple drivers who go to the company. So every morning, which I think is from 9:50 a.m. to about 11:30 a.m., a bunch of those delivery service partners come in. For 20 minutes, they have the opportunity to load up all their gear and hit the road. Then another delivery service partner brings in all their trucks and goes through the same process. And once it’s on the truck, it’s there and it’s delivered.
Small businesses are also important at the beginning of the implementation process
Shawn Hessinger: It sounds like you’re saying that small businesses are at the beginning of the process because they have sales and stuff queuing in Amazon warehouses — and they’re also at the end of the process when it comes to delivering goods to customers.
Brent Leary: Yeah, I think you’re right about that. You think of sellers who… not only sell on the platform… but a certain number of them also use the fulfillment by Amazon service. That’s why their inventory is in one of these fulfillment centers, so it’s easier and more efficient to move from someone who buys it to bam! now it’s already in an Amazon facility.
So it streamlines the process of getting that product to the customer. But those delivery service partners out there are small businesses. I think it’s a service in a relationship that Amazon has invested in… I think, going back to 2018. And so, I think there’s about 3000, with maybe just the US part of these delivery service partners.
And, you know, me personally, my experience last week, this one delivery station in Atlanta, and there are multiple delivery stations across the state. But I went to one of them, and each of those stations has a number of delivery service partners that it works with. So once that package is processed, it comes in from handling and sorting and it goes to the delivery station, it is processed, and then it’s ready to go.
Once it comes out, it will be handled by a delivery service partner, a non-Amazon employee. So there are seven that this particular facility is partnering with…seven small businesses that are delivery service partners.
And each of them has multiple drivers. So they bring them all in at once. The delivery service partner 1 comes in at 9:50 am – seven or eight of them are trucks belonging to that delivery service. But they all come in and they can be all sizes… can be vans… can be big trucks, but they have 20 minutes to load each of those vehicles for that particular service partner so they can hit the road and can deliver stuff there.
Amazon Operational Management Interviews
Shawn Hessinger: You did some interviews there, which is great. Can you arrange the first interview we have here, who we’re talking to and what they’re talking about?
Brent Leary: On this tour I had two guides. The first one I’m going to call her by her nickname “YoYo Johnson” because that’s what everyone called her. She is the operations manager of that facility. She did a great job showing me what was happening inside.
Shawn Hessinger: Let’s watch that video now. Then we’ll come back to talk about the next interview you did.
YoYo Johnson (video transcript):
We are currently on our launch pad. We operate two different launch pads at the same time here at DGT-8 and it is on the launch pad that the magic happens.
We have our delivery service partners. They let their drivers drive up the launch pad in their vehicles. And once they’re on the launch pad, we have a whole process that we go through to make sure we maintain safety on the trail at all times. So to my right you can see our queue location before the drivers actually get to the launch pad. And then they are released by an air traffic controller to get to the launch pad.
That person will, quite literally, control the flow of traffic that gets to the launch pad and make sure no drivers leave the vehicle until we have it completely clear, every vehicle has stopped. There are no people or products on the launch pad and we make sure everything is clear to go. Once we have all that clear, our drivers have 20 minutes from the time they get to the launch pad to load their entire vehicle with their full route and exit the launch pad to start their parcel delivery shipping process.
Amazon’s Last Mile Service in action
Shawn Hessinger: Next, we hear from Ross Kirkpatrick, Operations Manager at Amazon Logistics, about the process by which Amazon delivery partners load packages for the last mile of their journey to the customer’s doorstep.
Ross Kirkpatrick (video transcript):
It’s quite interesting how the staging works. Our Under the Roof team will bring the packages to the place where you can see our bins. What we call a carrier bag becomes a bin with multiple packages in those bins. They load them first in a certain order.
So, under the roof, we take that route backwards so that it’s more efficient for the drivers to deliver forward on the road. So basically working the system backwards to get more efficiency on the road. So, as you’ll see, drivers will put that cart by their van first and then load them in a specific order that their flex app actually shows in real time. So it gives them step by step, hey, this is going to be for example, your first bag will be 457 blue like this first driver has in the first route. So [it’s] very important that we can stimulate efficiency.
Shawn Hessinger: And Brent, put this last clip on for us.
Brent Leary: This is one that caught my interest when I spoke to Ross. He said that if you use the Amazon app, you can find all kinds of notifications, such as a notification when you’re next in line to be delivered.
Ross Kirkpatrick (video transcript):
We’re trying to give our customers that 360-degree view…consistent updates over the lifetime of the package so they understand when they’ll receive their package, right? So there are actually updates that customers will receive on their Amazon app, if they had the notifications turned on for updates to their delivery process. They are even updated for when the package leaves the fulfillment center and when it goes to our delivery station.
So, it updates that delivery time. And then also if a driver has that delivery next time, he will notify the customer: you are next for the next stop of that driver’s route to basically proactively, proactively allow that customer to prepare for that delivery, to receive that package from that customer, and then also be able to safely collect that package at the time of that delivery.
Looking at the example we have here about last mile service, one business tip we can suggest is that you consider partnering with a larger company when you start out. That gives you reach and resources you might not otherwise have to grow your business faster than you ever thought possible.
If you enjoyed learning how small businesses can provide last mile services, you might enjoy reading Small Biz Trend’s post How to Start an Amazon DSP Business. It will take you through everything you need to know about starting and running your own parcel delivery business.
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This post Brent Leary on Partnership with Amazon for the Last Mile
was original published at “https://smallbiztrends.com/2022/09/amazon-last-mile.html”