Last-mile delivery has always been big business, and companies from FedEx Ground to DHL and even smaller regional and local companies have contracted to accomplish this final stage in the logistics chain. When Amazon entered the space, they offered an easy and inexpensive way for contractors to become a part of their Amazon Delivery Service Partner Program and join one of the largest in-house logistics partners in the world.
As the program has evolved, these businesses can now be bought, sold, and transferred from contractor to contractor in various ways. Here’s everything you need to know about how it works and how you can be a part of it.
The Amazon Delivery Service Partner Program and Independent Contractors
Like similar last-mile businesses, Amazon Delivery Service Partner (DSP) businesses are run by independent contractors, but there are some key differences. While similar to route ownership through companies like FedEx Ground, the emphasis is on entrepreneurs who run their own delivery business under the Amazon umbrella.
Contractors hire their own delivery staff, and although Amazon does offer training and certification, much of this is up to the business owner. They carry their own business insurance and can either lease or purchase vehicles through the Amazon fleet program.
Most contractors own more than one route, but routes are not set territories. Instead, the route can vary based on delivery volume and Amazon’s needs. While they will be in the same general area, the exact boundaries where the contractor will make deliveries can vary slightly from week to week.
This adaptability takes some getting used to, but many DSP owners find that the result is a more efficient business with less downtime and fewer miles between stops. This is largely due to technology integration and some route efficiency optimizations Amazon has adopted.
Technology, Efficiency, and Route Optimization
As we discussed previously in this blog in detail, Amazon adopted a new algorithm, one that attempts to solve the issue of two trucks visiting the same neighborhood, sometimes even more than once per day.
This program, called CONDOR, attempts to solve a very complex mathematical problem. Even with only ten deliveries, unless they are all in a row on the same street, a driver can literally take thousands of routes to visit all of them. Add over 100 stops and several routes, and the problem becomes astronomical.
How does a driver choose this route? Well, often inefficiently, based on a real lack of data, time constraints, or other factors. Add more than one driver in an area, and without a robust load algorithm, two drivers might visit the same house on the same day at different times.
But new large data sets and more computing power allow for computer routing that is both intelligent and efficient. It’s not something that solves every problem on every route every single day, but things are improving. Other companies like FedEx Ground, which recently combined FedEx Ground and Express into a single division, are using similar programs to accomplish the same thing.
All this data fuels the Amazon Flex app, which not only aids in navigation but in package scanning and customer communication.
When a driver drops a package, they take a photo, and the customer is almost immediately notified. From the driver’s standpoint, they travel fewer miles in a single day with more deliveries within those miles.
And from an Amazon Delivery Service Partner owner’s perspective, this saves money, increases customer confidence and satisfaction, and improves driver workflows, providing them with a better work experience and environment.
This integration of technology and route optimization makes this an even more desirable business for entrepreneurs everywhere: that, and the emphasis the company puts on safety.
Safety and Amazon Delivery Service Partner Businesses
There are two aspects to last-mile delivery safety that have often been issues in the industry. The first is the need for speed, and the second is the weather.
When drivers are on tight schedules and must get packages to their destinations quickly, and they have miles to go, the tendency is to speed where they can and cut corners as needed. But this is impossible: drivers are clearly visible on the road in well-marked trucks and are always held to a higher standard than other drivers.
This leads to other safety concerns: avoiding backing up, walking around the vehicle before drivers move whenever it has been out of their sight, and obeying all traffic laws and signs.
The second is the weather: in states where winters are harsh, monsoons and other seasonal storms bring danger, or where extreme heat can seriously impact drivers, safety is a top concern. But there is no way to control the weather, and packages must be delivered anyway.
Amazon has strict safety protocols for drivers and contractors. Contractors often add protocols of their own, as tickets and accidents can make insurance prohibitively costly. And driver training is a part of every new hire process.
A driver must have a clean record and pass training to work with any Amazon contractor. All vehicles must receive regular maintenance and meet repair standards. This also makes things safer for drivers, the public, and contractors while saving them money in the long run.
Amazon has a company reputation to protect, and any driver using a vehicle with their name on it must uphold that reputation. Safety is a non-negotiable company priority.
Amazon Training and Support
Amazon offers both training and support not only in safety and operations but also in business. Contractors get access to technical assistance and a network of fellow partners who want them to succeed.
The management infrastructure will help DSP owners navigate both common and uncommon problems. Loaders, package handlers, order pickers, and other warehouse personnel are also well-trained and supportive.
Amazon is all about the customer experience, and that is reflected in the entire training and support teams. The driver can be friendly and careful, but if a package is delayed, damaged in transit, or even lost, that customer experience is tainted. Rather than deal with issues after the fact, the Amazon Delivery Service Partner program works to prevent them instead.
If a route owner or driver needs something, all they have to do is ask. The company wants its partners to succeed and positively impact their local community.
Scaling Your Amazon DSP Business
The beauty of Amazon’s program is that it is built to scale. Contractors who do well and receive good ratings can purchase new routes, expansion routes, or even routes owned by other drivers who want to sell.
Good ratings are achieved by meeting or exceeding Amazon delivery standards. This includes making deliveries on time while still adhering to safety standards. Handling packages responsibly and without damage, placing deliveries carefully to avoid theft, protecting them from the weather, and making them visible to customers are all critical steps.
Taking photos to enhance the customer experience, handing packages directly to customers when possible, and treating their property respectfully also make a difference. Contractors who consistently meet these standards are more likely to be approved when it comes time to scale their business.
Amazon encourages this, and here at Route Advisors, we do too. We can help you find additional routes and assist with the purchasing process, helping you make sure the route you have your eye on is the right route for you.
And Amazon is growing all the time. As the popularity of eCommerce continues to grow, so will Amazon’s warehouse networks, delivery services, and their need for drivers and contractors. Your business can scale to whatever size you want within Amazon guidelines, and you can hire more drivers, add more vehicles, and increase your volume and profitability.
You can do all of this with the incredible support of the Amazon logistics system.
Embracing Sustainability and Continuous Improvement
Amazon Delivery Service Partner division wants to continually stay the best and to embrace green practices where possible. Many contractors are switching to electric vehicles endorsed by Amazon and available to lease. Several Amazon distribution centers operate on sustainable energy, intending to have as close to a zero-carbon footprint as possible.
DSP owners can adopt eco-friendly practices designed to save fuel or transition to EVs, recycle whenever possible, and more, all with company-backed support. It’s Amazon’s goal to constantly improve and be on the leading edge of last-mile delivery technology.
This includes much of what we have discussed here:
- Optimizing routes constantly and continuing to do so.
- Adopting delivery technology that makes routes more efficient and safer.
- Varying routes instead of relying on rigid geographic boundaries.
- Emphasizing safety and providing training and support to improve constantly.
- Shaping the future of last-mile delivery through constant innovation, including drones and other emerging technology.
The good news is that you can be a part of it. If you want to own and operate an Amazon Delivery Service Partner business, it is easier than you think. Contact us here at Route Advisors to help set you on the right path. We’ll help you find the route that would be best for you and your situation.
And if you want to scale, we’re also here to help with that. Amazon Delivery Service partner routes are a great opportunity, and there is no better time to get started than right now.