Amazon orders 20,000 Mercedes-Benz vans for parcel delivery program
Vehicles will be leased to small fleet owners in online retailer's "delivery service partner" program, making Amazon the world's largest Sprinter Van customer.
Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
E-commerce giant Amazon.com Inc. has ordered 20,000 delivery vans from Merecedes-Benz Vans, the automaker said today, in an announcement that puts meat on the bones of Amazon's plan to recruit small business owners in launching parcel delivery fleets around the country to help handle its rising flood of online shopping shipments.
Mercedes has already delivered the first vehicle of that order to Amazon, and is quickly increasing production at a 222-acre plant in North Charleston, S.C., that it recently upgraded in a two-year, $500 million expansion, the German company said. That plant now employs 900 workers and Mercedes plans to ramp that up to 1,300 workers by the end of 2020 as it increases U.S. production of its third-generation Sprinter van, the company said.
Seattle-based Amazon made the large order with its typical bravado, instantly becoming the world's largest customer for Mercedes' Sprinter van, which the carmaker will deliver in an Amazon-branded version for the e-commerce firm's "delivery service partner" program, Mercedes said. While the order is large, it is in line with Amazon's description of that program, which the company said could ultimately allow "hundreds of new, small business owners to hire tens of thousands of delivery drivers."
Amazon did not reply to a request for comment.
Amazon unveiled its "delivery service partner" program in June, saying it would recruit entrepreneurs to create fleets of parcel-delivery vehicles by offering them training and discounts on vehicle leases and insurance. The company also said it would provide predictable volumes of shipping business to those fleets, guaranteeing them a demand for the new service while helping Amazon itself handle its exploding volume of e-commerce fulfillment business.
Amazon currently relies on a combination of service providers to deliver the boxes and pouches it sends to shoppers' homes every day, using major logistics and transportation providers such as FedEx Corp., UPS Inc., and the U.S. Postal Service, as well as local courier fleets and part-time citizen drivers working through the company's "Flex" service.
By moving some of its last-mile delivery business to internal channels, Amazon may shift some business away from its traditional delivery partners, but that change has been expected, said Philip Evers, logistics professor at the University of Maryland's Robert H. Smith School of Business. "I'm sure [UPS and FedEx] are both continually watching Amazon, but this isn't coming out of nowhere," Evers said. "E-commerce is booming in general, and Amazon's not the only [retail] company out there. So even as Amazon does more business, FedEx and UPS will do more. A rising tide lifts all ships."
Contacted for reaction to Amazon's large purchase of vehicles, UPS likewise said that the market is growing fast enough to sustain its own business growth, which includes a variety of services that go beyond final-mile delivery, such as warehousing and fulfillment, parcel tracking, delivery status updates, custom delivery options, and simplified merchandise returns, Matthew O'Connor, UPS' senior manager for public relations, said in an email.
"UPS is confident in its strategies and believes there is tremendous opportunity in the B2C and B2B market," the company said in a statement. "Industry forecasts indicate there is near 50 percent package volume growth coming in the U.S. between 2018 and 2022, due to strong demand for residential and business online commerce deliveries."
As for the vehicle itself, choosing Mercedes to provide the large order of vans is a safe choice for Amazon because the Sprinter has long been a favorite vehicle in the segment of large, square vans intended for the delivery and construction sectors, alongside options like the Ford Transit or the Ram Promaster, Evers said.
Mercedes says its investment in the South Carolina plant will now continue to improve that model, adding features like a new multimedia system, upgraded cockpit control and display, and driver assistance systems borrowed from Mercedes' line of luxury passenger cars.
The more surprising aspect of Amazon's order is that it chose a single supplier for the entire order of vehicles, instead of spreading its order around a variety of automakers, said Evers.
However, like many other moves Amazon has made, the decision may pay off through value created by the sheer scale of the purchase. And by making that capital investment in its "delivery service partner" program, the company will be able to continue to grow without adding internal labor costs, Evers said. That could be a canny move at a time when low unemployment rates and truck driver shortages make it hard for many logistics and transportation providers to hire employees.
"[Amazon] has telegraphed this for a while now, and it's a logical step," Evers said. "If you think of the universe of logistics, they're filling in the holes. They already have planes and they have a large-truck fleet, and now they're filling in the gaps."
Warehouse automation orders declined by 3% in 2024, according to a February report from market research firm Interact Analysis. The company said the decline was due to economic, political, and market-specific challenges, including persistently high interest rates in many regions and the residual effects of an oversupply of warehouses built during the Covid-19 pandemic.
The research also found that increasing competition from Chinese vendors is expected to drive down prices and slow revenue growth over the report’s forecast period to 2030.
Global macro-economic factors such as high interest rates, political uncertainty around elections, and the Chinese real estate crisis have “significantly impacted sales cycles, slowing the pace of orders,” according to the report.
Despite the decline, analysts said growth is expected to pick up from 2025, which they said they anticipate will mark a year of slow recovery for the sector. Pre-pandemic growth levels are expected to return in 2026, with long-term expansion projected at a compound annual growth rate (CAGR) of 8% between 2024 and 2030.
The analysis also found two market segments that are bucking the trend: durable manufacturing and food & beverage industries continued to spend on automation during the downturn. Warehouse automation revenues in food & beverage, in particular, were bolstered by cold-chain automation, as well as by large-scale projects from consumer-packaged goods (CPG) manufacturers. The sectors registered the highest growth in warehouse automation revenues between 2022 and 2024, with increases of 11% (durable manufacturing) and 10% (food & beverage), according to the research.
The Swedish supply chain software company Kodiak Hub is expanding into the U.S. market, backed by a $6 million venture capital boost for its supplier relationship management (SRM) platform.
The Stockholm-based company says its move could help U.S. companies build resilient, sustainable supply chains amid growing pressure from regulatory changes, emerging tariffs, and increasing demands for supply chain transparency.
According to the company, its platform gives procurement teams a 360-degree view of supplier risk, resiliency, and performance, helping them to make smarter decisions faster. Kodiak Hub says its artificial intelligence (AI) based tech has helped users to reduce supplier onboarding times by 80%, improve supplier engagement by 90%, achieve 7-10% cost savings on total spend, and save approximately 10 hours per week by automating certain SRM tasks.
The Swedish venture capital firm Oxx had a similar message when it announced in November that it would back Kodiak Hub with new funding. Oxx says that Kodiak Hub is a better tool for chief procurement officers (CPOs) and strategic sourcing managers than existing software platforms like Excel sheets, enterprise resource planning (ERP) systems, or Procure-to-Pay suites.
“As demand for transparency and fair-trade practices grows, organizations must strengthen their supply chains to protect their reputation, profitability, and long-term trust,” Malin Schmidt, founder & CEO of Kodiak Hub, said in a release. “By embedding AI-driven insights directly into procurement workflows, our platform helps procurement teams anticipate these risks and unlock major opportunities for growth.”
Here's our monthly roundup of some of the charitable works and donations by companies in the material handling and logistics space.
For the sixth consecutive year, dedicated contract carriage and freight management services provider Transervice Logistics Inc. collected books, CDs, DVDs, and magazines for Book Fairies, a nonprofit book donation organization in the New York Tri-State area. Transervice employees broke their own in-house record last year by donating 13 boxes of print and video assets to children in under-resourced communities on Long Island and the five boroughs of New York City.
Logistics real estate investment and development firm Dermody Properties has recognized eight community organizations in markets where it operates with its 2024 Annual Thanksgiving Capstone awards. The organizations, which included food banks and disaster relief agencies, received a combined $85,000 in awards ranging from $5,000 to $25,000.
Prime Inc. truck driver Dee Sova has donated $5,000 to Harmony House, an organization that provides shelter and support services to domestic violence survivors in Springfield, Missouri. The donation follows Sova's selection as the 2024 recipient of the Trucking Cares Foundation's John Lex Premier Achievement Award, which was accompanied by a $5,000 check to be given in her name to a charity of her choice.
Employees of dedicated contract carrier Lily Transportation donated dog food and supplies to a local animal shelter at a holiday event held at the company's Fort Worth, Texas, location. The event, which benefited City of Saginaw (Texas) Animal Services, was coordinated by "Lily Paws," a dedicated committee within Lily Transportation that focuses on improving the lives of shelter dogs nationwide.
Freight transportation conglomerate Averitt has continued its support of military service members by participating in the "10,000 for the Troops" card collection program organized by radio station New Country 96.3 KSCS in Dallas/Fort Worth. In 2024, Averitt associates collected and shipped more than 18,000 holiday cards to troops overseas. Contributions included cards from 17 different Averitt facilities, primarily in Texas, along with 4,000 cards from the company's corporate office in Cookeville, Tennessee.
Electric vehicle (EV) sales have seen slow and steady growth, as the vehicles continue to gain converts among consumers and delivery fleet operators alike. But a consistent frustration for drivers has been pulling up to a charging station only to find that the charger has been intentionally broken or disabled.
To address that threat, the EV charging solution provider ChargePoint has launched two products to combat charger vandalism.
The first is a cut-resistant charging cable that's designed to deter theft. The cable, which incorporates what the manufacturer calls "novel cut-resistant materials," is substantially more difficult for would-be vandals to cut but is still flexible enough for drivers to maneuver comfortably, the California firm said. ChargePoint intends to make its cut-resistant cables available for all of its commercial and fleet charging stations, and, starting in the middle of the year, will license the cable design to other charging station manufacturers as part of an industrywide effort to combat cable theft and vandalism.
The second product, ChargePoint Protect, is an alarm system that detects charging cable tampering in real time and literally sounds the alarm using the charger's existing speakers, screens, and lighting system. It also sends SMS or email messages to ChargePoint customers notifying them that the system's alarm has been triggered.
ChargePoint says it expects these two new solutions, when combined, will benefit charging station owners by reducing station repair costs associated with vandalism and EV drivers by ensuring they can trust charging stations to work when and where they need them.
New Jersey is home to the most congested freight bottleneck in the country for the seventh straight year, according to research from the American Transportation Research Institute (ATRI), released today.
ATRI’s annual list of the Top 100 Truck Bottlenecks aims to highlight the nation’s most congested highways and help local, state, and federal governments target funding to areas most in need of relief. The data show ways to reduce chokepoints, lower emissions, and drive economic growth, according to the researchers.
The 2025 Top Truck Bottleneck List measures the level of truck-involved congestion at more than 325 locations on the national highway system. The analysis is based on an extensive database of freight truck GPS data and uses several customized software applications and analysis methods, along with terabytes of data from trucking operations, to produce a congestion impact ranking for each location. The bottleneck locations detailed in the latest ATRI list represent the top 100 congested locations, although ATRI continuously monitors more than 325 freight-critical locations, the group said.
For the seventh straight year, the intersection of I-95 and State Route 4 near the George Washington Bridge in Fort Lee, New Jersey, is the top freight bottleneck in the country. The remaining top 10 bottlenecks include: Chicago, I-294 at I-290/I-88; Houston, I-45 at I-69/US 59; Atlanta, I-285 at I-85 (North); Nashville: I-24/I-40 at I-440 (East); Atlanta: I-75 at I-285 (North); Los Angeles, SR 60 at SR 57; Cincinnati, I-71 at I-75; Houston, I-10 at I-45; and Atlanta, I-20 at I-285 (West).
ATRI’s analysis, which utilized data from 2024, found that traffic conditions continue to deteriorate from recent years, partly due to work zones resulting from increased infrastructure investment. Average rush hour truck speeds were 34.2 miles per hour (MPH), down 3% from the previous year. Among the top 10 locations, average rush hour truck speeds were 29.7 MPH.
In addition to squandering time and money, these delays also waste fuel—with trucks burning an estimated 6.4 billion gallons of diesel fuel and producing more than 65 million metric tons of additional carbon emissions while stuck in traffic jams, according to ATRI.
On a positive note, ATRI said its analysis helps quantify the value of infrastructure investment, pointing to improvements at Chicago’s Jane Byrne Interchange as an example. Once the number one truck bottleneck in the country for three years in a row, the recently constructed interchange saw rush hour truck speeds improve by nearly 25% after construction was completed, according to the report.
“Delays inflicted on truckers by congestion are the equivalent of 436,000 drivers sitting idle for an entire year,” ATRI President and COO Rebecca Brewster said in a statement announcing the findings. “These metrics are getting worse, but the good news is that states do not need to accept the status quo. Illinois was once home to the top bottleneck in the country, but following a sustained effort to expand capacity, the Jane Byrne Interchange in Chicago no longer ranks in the top 10. This data gives policymakers a road map to reduce chokepoints, lower emissions, and drive economic growth.”