As we pen this Supply Chain Matters blog during the traditional Black Friday shopping holiday, there are visible signs of capacity stress surrounding online retail platform provider Amazon, and among parcel logistics and “last mile” transportation networks.
Earlier this week, Business Network broadcaster CNBC reported that Amazon is now very actively promoting its “Amazon Day” shipment option, designating a specific day of the week for online shoppers to receive all of their outstanding orders as a means to help throttle back on last-mile delivery crunches on any given day. In addition, the online retailer reportedly is managing tighter capacity controls within its fulfillment warehouses.
Supply Chain Matters recently spoke with Jason Boyce, co-Founder of Avenue 7 Media and a nationally recognized Amazon expert and consultant to Amazon hosted sellers. Boyce told us of Amazon’s earlier efforts to limit inventory stocking of hosted sellers due to a lack of overall space, and voiced his perspective that seller’s run the risk of running out of inventory earlier in this holiday period because of needs to replenish more frequently.
MultiChannel Merchant, citing the Memphis Commercial Appeal, reported earlier this week that an email was sent to Seller Fulfilled Prime (SFP) shippers to cutback on the use of FedEx Ground and Home Delivery Services because of longer delivery times now being experienced. The report indicates that FedEx acknowledged these delays but indicating the need for increased flexibilities in use of the carrier’s capacity to serve shipping customers.
Readers might recall that FedEx suspended all direct contract ties to Amazon in 2019, in favor of other online retailers and shippers. This report noted that Amazon initiated a similar action informing sellers to not use FedEx Ground in December 2019 amid erosion of delivery times. The suspension was lifted in January of 2020.
With so many online consumers being urged and motivated to shop earlier, our belief is that the next few days will determine how parcel logistics and transportation networks will fare with extreme volumes.
Supply Chain Matters has in the past highlighted Amazon labor activism that often occurs at the height of the holiday fulfillment period. In prior years, such activism has centered on European based customer fulfillment facilities, specifically Germany, along with pilots of contracted air freight carriers to Amazon Air, in various labor contract negotiations.
This year, labor activism headlines are occurring closer to home and centered at a distribution center located just outside Birmingham Alabama. Reportedly upwards of 1500 workers at this facility have petitioned the U.S. National Labor Relations Board (NLRB) for a unionization election.
According to a report by National Public Radio, such a filing typically requires at least 30 percent of workers signing a petition indicating they seek labor union representation. The NLRB has scheduled a hearing on December 11th to determine whether the petition meets the criteria to proceed to an election.
Amazon, in a released statement indicated that the online retailer “already offers what these groups claim they want.” Further stated:
“We don’t believe this group represents the majority of our employees’ views. Our employees choose to work at Amazon because we offer some of the best jobs available everywhere we hire, and we encourage anyone to compare our overall pay, benefits, and workplace environment to any other company with similar jobs.”
Coincidentally or by design, Amazon has announced an additional $300 bonus for essential employees working within this extreme new wave of COVID-19 infections across the United States.
As more and more Amazon Prime branded delivery vans, tractor trailer units and cargo aircraft flood city streets and the airways, labor activism directed at the online retailer will likely continue. It may well be that Amazon will have to staff-up dedicated response teams.
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