Amazon.com Inc. is working to recruit thousands of owner-operators who will haul for Amazon's last-mile delivery services, attendees at the NASSTRAC annual shippers conference in Orlando were told today.
Seattle-based Amazon has set a target of 30,000 drivers by the time the operation is fully scaled up, according to Lance Healy, co-founder of Cleveland-based logistics IT firm Banyan Technology, who disclosed Amazon's plans during a panel at NASSTRAC.
The Seattle-based e-tailing giant is also working, on a limited basis, with Paul Hanson Partners, which operates a web pOréal for firms like Amazon to determine whether contract carriers have proper insurance documentation and appropriate operating permits. The pOréal also provides links to driver background-check and drug-screening programs, as well as other verification services that a company may require when vetting and contracting with prospective carriers.
Napa, Calif.-based Paul Hanson does not help companies search for and recruit contractors, according to President and CEO Lisa Paul. "Each freight broker we work with has their own recruitment solutions, and the data we store is exclusive to the company we contract with for services," Paul said in an e-mail. "Our strategy is to help freight brokers bring on contractors faster with greater transparency to the quality of that carrier."
Under a typical on-boarding process, prospective drivers are vetted to ensure they are in compliance with various state and federal requirements. Once the driver passes the initial screen, the pOréal will then provide the carrier with the necessary operating certificates and insurance documentation.
Some of the drivers who sign up may have commercial drivers licenses (CDLs). However, because CDLs are not required for drivers who operate vehicles of less than 26,001 pounds and aren't carrying hazardous materials, the license would not be an absolute requirement, especially since many of Amazon's shipments weigh 5 pounds or less.
In addition, drivers operating within a 100- to 150-air-mile radius would either be exempt from the same federal "hours of service" rules governing driver operations, or would be subject to looser restrictions. It is believed that many of the hauls for Amazon would fall within that mileage range.
As outlined at the NASSTRAC event, on-boarded drivers will carry goods over relatively short lengths of haul from Amazon customers to one of the e-tailer's many fulfillment centers. Drivers will also carry outbound goods, also over short stage lengths, from the fulfillment center to the destination.
The operation supported by the on-boarding platform resembles that of a less-than-truckload (LTL) model, where an Amazon fulfillment center would act as a hub to receive inbound traffic from various shippers and then consolidate those goods for transportation to the final destination, Healy said after the panel. "This is Amazon's answer to LTL," he said.
It is also Amazon's latest step in a multi-year strategy to build out a global transport and logistics network that would fulfill and deliver its own goods ordered from its web site as well as shipments from third-party merchants using the company's "Fulfillment by Amazon" service. A growing percentage of orders placed on Amazon are for the products of these third parties. Amazon has made no secret of its desire to control more of its supply chain to meet the surging demand of goods shipped under its Amazon "Prime" service, where, for a flat annual fee, customers get two-day deliveries of millions of eligible items.
Within the past year two years, Amazon has agreed to lease 40 cargo airplanes and purchased thousands of 53-foot truck-trailers. Its Chinese subsidiary has received authority from the U.S. government to operate as a non-vessel operating common carrier (NVOCC) to move oceangoing cargo from China to the U.S. under its own bill of lading. It announced plans in February to build an air hub in Cincinnati to support the two-day delivery product. Earlier this week, John G. Larkin, analyst for investment firm Stifel, wrote that he was told by a reliable source that Amazon has placed a large order for tractors to haul the large trailers.
Editor's note: This is a revised version of an earlier story. It clarifies Paul Hanson Partners' services, and its involvement with Amazon.