Amazon: We are not trying to destroy Royal Mail

[POSTMAN]

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Amazon has been accused of many things in the last two years, including not paying its taxes, damaging the high street, and mistreating staff. But now it is also fighting claims that it is trying to destroy Royal Mail.

Shares in the postal service have slumped after it warned that parcel revenues are not growing as quickly as expected because Amazon has launched its own delivery service.

However, Christopher North, the boss of Amazon in the UK, has insisted the online US retailer has no intention of killing Royal Mail with its own delivery business Amazon Logistics.

“Amazon Logistics is not about replacing a carrier, it is about complementing,” North said in an interview ahead of Black Friday, which he expects to be Amazon’s biggest ever day in the UK.

“It is about expanding the total capacity in the UK for fast delivery. It is also about meeting the challenge of the peaks in our business. At this time of year, our business is doing many, many multiples of what we do in the rest of the year. That is something that no one carrier can meet. No one carrier can go from handling x volume to 20x volume over a period of just a month.

“So you need to complement them [the national carriers]. You can think of them as backbone service, not just Royal Mail but all the national carriers.”
Amazon Logistics was set up in the UK two years ago because, according to North, the company was concerned there was not enough delivery capacity to meet a sharp increase in online orders and a growing demand for next-day delivery.

Today, the business has 13 delivery hubs and two sorting centres, in Hemel Hempstead and Manchester. These sites organise Amazon’s packages and then pass them to vans to deliver to their destination.

The twist is that the staff and delivery vans belong to local and regional businesses, not Amazon. The company simply provides the technology and logistics, as the name of the business suggests, and acts as a platform for other delivery firms.

The problem for Royal Mail is that in the past these delivery firms, some of which only employ a handful of people, would never have been able to work with Amazon.
In total, 45 delivery firms are working with Amazon. The US retailer declines to publicly reveal what proportion of its products are delivered through Amazon Logistics, but it is understood to reach close to 50pc some weeks.

However, North insists Amazon has no interested in pushing all its deliveries through Amazon Logistics.
“We are not going to do that,” North said. “The answer is you want to spread your volumes across multiple partners. You don’t want to have a single point of failure.”

The UK managing director said Amazon has a “great partnership” with Royal Mail. The companies have just announced a deal that will see Amazon install collection points in 10,500 post offices across the UK.

“These national carriers are well placed to thrive with the growth of ecommerce overall,” he said. “But it does mean that Royal Mail, and I can point to other carriers too, need to innovate to find ways to go faster, to provide more convenience to customers, and to experiment with different models of delivery like click-and-collect.”

North was speaking as Amazon gears up for Black Friday, which he predicted will generate more than 4.1m orders, the daily record for the company set on Cyber Monday last year.
“It is something we started in the UK, but I love the fact so many companies have jumped on the bandwagon because it makes it bigger for everyone,” North said.
“It has created a genuine excitement with consumers. We are going to be out there competing to make sure there is only one place customers have to visit, that every Black Friday deal customers want is on Amazon. But I am sure that is what all our competitors are going to do.”

Amazon has been planning Black Friday 2014 for a year and North said that he will “sleep a lot better” knowing the company has its own delivery network to help to deal with the surge in orders.

“I think we realised two years ago that the total demand in the UK for ecommerce in general, the increasing demand from Amazon as part of that, and this trend of customers wanting faster and faster deliver was actually threatening to exhaust the total capacity in the UK,” North said.

“It is always difficult to ask what would have happened otherwise, but I can say that I sleep a lot better knowing that we can complement the great work that our national carrier partners are doing with the capacity that the DSPs [delivery service partners] and Amazon Logistics are doing.”

[wabbithunta]

Amazon will still get failed and missed deliveries from the so called Amazon Logistics, aka "man in a van".
Another reason why they're back to using Royal Mail? Also apart from RM being used to delivery to Post Offices (Amazon customers have to pay them for that "pleasure") They probably can't cope with the amount of online orders generated in the lead up to Christmas and beyond. We struggled with their parcels last year, so they'll be in the poo for definite.

[janitor]

If you look at amazons own customer forum, amazon logistics is probably the most common complaint, about late or missing deliveries, think they have even managed to over take Yodel, which is no mean feat.

[SpacePhoenix]

They probably can't cope with the amount of online orders generated in the lead up to Christmas and beyond. We struggled with their parcels last year, so they'll be in the poo for definite.

I doubt that any courier, even RM could handle all the parcels that Amazon send out if they only used one courier, especially at Christmas

[raikky]

royal mail cant handle a xmas#, not in our office. they always understaff and its not unusual to have around 15 managers a day at our office doing parcels just to clear up.

[smok3y666]

I work for RM so don't take this the wrong way but I've had far more late delivered items from RM than Amazon, I've even had stuff from Amazon turn up out the blue on a Sunday when I was expecting it to arrive on Monday. This however only seems to have happened since our local DO had a shake up maybe 18 months ago.

[interesting]

royal mail cant handle a xmas#, not in our office. they always understaff and its not unusual to have around 15 managers a day at our office doing parcels just to clear up.

Royal Mail reacts to Xmas parcels , rather than predicts Xmas parcels

[Rommagic]

Lots of Amazon parcels coming to us now.

[interesting]

They be gone in January

[TrueBlueTerrier]