Timeline of Amazon’s logistics growth as it looks to test UPS, FedEx

March 2012: Amazon acquires robot maker Kiva Systems for $775 million

Before Ama­zon built its own net­work of planes, trains, and trucks, it began cre­at­ing a ful­fill­ment cen­ter net­work. The first Ama­zon ful­fill­ment cen­ter opened in 1999. 

By 2012, it had 40 ful­fill­ment cen­ters nation­wide. And, as more and more cus­tomers demand­ed Ama­zon Prime’s speedy ship­ment, trans­porta­tion costs were start­ing to track upward. 

That’s the year Ama­zon start­ed tak­ing seri­ous­ly the need to slash its trans­porta­tion costs — a theme that per­vad­ed the 2010s as its ful­fill­ment costs began to boom.  

For that pur­pose, Ama­zon acquired Kiva Sys­tems for $775 mil­lion. Kiva’s autonomous ware­house tech­nol­o­gy would help asso­ciates “pick, pack, and stow” Ama­zon goods.

December 2013: Amazon customers don’t get their orders by Christmas, and it becomes clear that the US Postal Service, FedEx, and UPS won’t be able to deliver all of Amazon’s packages.

Ama­zon’s third-par­ty deliv­ery part­ners, name­ly UPS and FedEx, failed to deliv­er pack­ages on time for Christ­mas Day.

Ama­zon had to issue $20 gift cards and apolo­gies to cus­tomers.

Indus­try watch­ers took the hol­i­day fail­ure as a sign that Ama­zon would like­ly invest in its own inter­nal logis­tics net­work.  

April 2014: Amazon begins delivering groceries through its own courier service

The Wall Street Jour­nal revealed that, months after Ama­zon’s Christ­mas fias­co, the e‑commerce giant was exper­i­ment­ing with last-mile deliv­er­ies.

A fleet of green Ama­zon­Fresh trucks was spot­ted in San Fran­cis­co, with reports that Ama­zon would build out its same-day gro­cery deliv­ery busi­ness in New York and Seat­tle next.

How­ev­er, the ser­vice was spot­ty in ear­ly days. Con­sumers told The Jour­nal in 2014 that their “Ama­zon Logistics”-shipped orders were late.

September 2015: Amazon launches Amazon Flex

Seen as a shot to Post­mates, Ama­zon launch­es Ama­zon Flex to pow­er its one-hour Prime Now offer­ing. Prime Now was announced in Decem­ber 2014.

Work­ers can earn $18 to $25 an hour through Ama­zon Flex and must use their own vehi­cles.

November 2015: Amazon partners with ATSG to launch Amazon Prime Air

A Moth­er­board inves­ti­ga­tion revealed that a client lat­er con­firmed to be Ama­zon was con­tract­ing four planes with Air Trans­port Ser­vices Group out of Wilm­ing­ton, Ohio.

“It is the per­fect set­up,” Bran­don Fried, exec­u­tive direc­tor at the air freight for­ward­ing advo­ca­cy group Air­for­warders Asso­ci­a­tion, told Moth­er­board at the time. “It’s ready to go, it’s turnkey: They have ware­hous­ing, and they have a very sophis­ti­cat­ed land­ing sys­tem in place, so it would­n’t be out­landish for them to bring the car­go in using a fleet of planes.”

December 2015: Amazon acquires thousands of branded trailers for big rigs

Ama­zon acquired “thou­sands” of truck trail­ers, accord­ing to a sto­ry from Recode. This would move Ama­zon goods between ful­fill­ment cen­ters, as well as from ful­fill­ment cen­ter to sort cen­ters (where the com­pa­ny sorts parcels by zip code to then be deliv­ered by USPS).

The com­pa­ny empha­sized to Recode it would still rely on oth­er truck­ing part­ners to car­ry goods, but that this move would give it “addi­tion­al capac­i­ty.”

March 2016: Amazon leases 20 Boeing 767 cargo jets from ATSG

Ama­zon expand­ed on its tri­al run with ATSG to lease 20 planes from the Ohio-based air­line. That makes it the only Amer­i­can retail­er with its own ded­i­cat­ed air car­go ser­vice.

Ama­zon also can expand its deal to up to 80 planes and can acquire $600 mil­lion of ATS­G’s shares — just under a fifth of the com­pa­ny. The car­go oper­a­tion is based 50 miles north­east of Cincin­nati, in the spot of a for­mer DHL hub. 

On a Jan­u­ary 28, 2016, earn­ings call, Ama­zon CFO Bri­an Olsavsky said:

In order to prop­er­ly serve our cus­tomers at peak, we’ve need­ed to add more of our own logis­tics to sup­ple­ment our exist­ing part­ners … Those car­ri­ers are just no longer able to han­dle all of our capac­i­ty that we need at peak. They have been and con­tin­ue to be great partners.t’s just we’ve had to add some resources on our own.”

May 2016: Amazon leases another 20 Boeing 767 planes and adds a new cargo partner — Atlas Air Worldwide

Six months after the world learned Ama­zon was pilot­ing an air car­go ser­vice, the megare­tail­er signed on a new part­ner — and 20 more planes. That brought its total fleet to 40 car­go car­ri­ers.

Atlas Air World­wide, a Pur­chase, New York-based com­pa­ny, said Ama­zon would also have the right to acquire up to 30% of the air car­go com­pa­ny.

“We are excit­ed to wel­come a great provider, Atlas Air, to sup­port pack­age deliv­ery to the rapid­ly grow­ing num­ber of Prime mem­bers who love ultra-fast deliv­ery, great prices and vast selec­tion from Ama­zon,” said Dave Clark, Ama­zon’s senior vice pres­i­dent of world­wide oper­a­tions, at the time. 

March 2016: FedEx CEO Fred Smith calls the idea that Amazon threatens his company ‘fantastical’ for the first time

As Ama­zon’s logis­tics moves bur­geoned, investors start­ed to pres­sure UPS and FedEx on what they were doing to pre­vent the loss of a mas­sive cus­tomer. More­over, they start­ed to won­der what the pack­age giants would do if Ama­zon start­ed to seri­ous­ly dis­rupt pack­age han­dling. 

For the first time (and cer­tain­ly not the last), FedEx founder and CEO Fred Smith rebuked that idea on a quar­ter­ly earn­ings call on March 16, 2016, call­ing the idea “fan­tas­ti­cal.” He added that reporters and ana­lysts who believe Ama­zon could dis­rupt FedEx and its peers are “devoid of in-depth knowl­edge of logis­tic sys­tems and the mar­kets which FedEx serves.”

Read more: Gold­man Sachs says Ama­zon’s logis­tics net­work is hard­ly a threat to FedEx or UPS. It needs years of new con­struc­tion and a whop­ping $122 bil­lion just to catch up.

“While recent sto­ries and reports of a new enti­ty com­pet­ing with the three major car­ri­ers in the Unit­ed States grabs head­lines, the real­i­ty is it would be a daunt­ing task requir­ing tens of bil­lions of dol­lars in cap­i­tal and years to build suf­fi­cient scale and den­si­ty to repli­cate exist­ing net­works like FedEx,” Mike Glenn, pres­i­dent of FedEx Ser­vices, added dur­ing the call.

Lat­er that year, UPS CEO David Abney echoed Smith’s sen­ti­ment. 

“We don’t believe that Ama­zon’s strat­e­gy is to do it them­selves and the rea­son we believe that is we have this huge infra­struc­ture, we’re invest­ing in tech­nol­o­gy, we have a great mutu­al rela­tion­ship with them,” Abney said in a CNBC inter­view in Decem­ber 2016.

January 2017: Amazon acquires ocean freight forwarding license, and begins building a $1.5B air hub in Cincinnati/Northern Kentucky

Ama­zon kicked off 2017 with two big pieces of news. 

One, the bur­geon­ing trans­porta­tion com­pa­ny had opened its own ocean freight for­warder — mean­ing it books space for con­tain­ers on ocean ves­sels and on the trucks that move imports from port to ware­house. 

From Octo­ber 2016 to Jan­u­ary 2017, Ama­zon moved 150 con­tain­ers of goods from Chi­na, accord­ing to a report in The Wall Street Jour­nal. 

“This is just anoth­er cog in the sup­ply chain that they’re putting under their con­trol, as well as cre­at­ing new rev­enue streams,” John Haber, chief exec­u­tive of sup­ply chain con­sul­tan­cy Spend Man­age­ment Experts, told the Jour­nal at the time.

Two, it announced plans to open a $1.5 bil­lion air hub at the Cincinnati/Northern Ken­tucky Inter­na­tion­al Air­port. That’s the air­port where Ama­zon began pilot­ing Ama­zon Air just two years ago.

November 2017: Amazon launches an app that could help automate the process in which truck drivers are connected to loads

As truck bro­ker­age star­tups like Uber Freight and Con­voy began build­ing up, Ama­zon made its first for­ay into the world of tech in truck­ing. 

Ama­zon Relay, the new app, would allow truck dri­vers to check in to ful­fill­ment cen­ters with a QR code, CNBC report­ed. That eased one aspect of the paper-heavy truck deliv­ery process — and hints that Ama­zon would make addi­tion­al moves into the world of truck­ing tech­nol­o­gy. 

February 2018: Amazon launches ‘Shipping with Amazon,’ which undercuts FedEx’s and UPS’ rates

Ama­zon’s inten­tions to edge out UPS and FedEx were becom­ing clear­er than ever. 

The Wall Street Jour­nal report­ed that Ama­zon launched a ser­vice called “Ship­ping with Ama­zon.” Through that fea­ture, Ama­zon would pick up pack­ages from its third-par­ty mer­chants and ship them to cus­tomers. 

The ser­vice pilot­ed in Los Ange­les. And while it was aimed at Ama­zon’s third-par­ty sell­ers, sources told The Jour­nal that the com­pa­ny would some­day car­ry non-Ama­zon parcels too. 

By Novem­ber, sell­ers start­ed to con­firm that Ship­ping with Ama­zon was under­cut­ting UPS and FedEx rates. One LA-based sell­er told CNBC that the home­grown ser­vice was 50% cheap­er than UPS and 30% cheap­er than FedEx. 

June 2018: Amazon launches Delivery Service Partners (DSPs) program

Ama­zon made waves when it said it would offer Amer­i­cans $10,000 to open a deliv­ery busi­ness. 

That announce­ment kicked off a new pro­gram called Deliv­ery Ser­vice Part­ners to move goods in the last mile. DSPs are small busi­ness­es that Ama­zon are able to indi­rect­ly con­trol and quick­ly scale up and down — but they don’t have the same com­pli­ca­tions as hir­ing and man­ag­ing deliv­ery dri­vers direct­ly. 

“This pro­gram sig­nals that Ama­zon would like to ramp up its last-mile logis­tics oper­a­tion more quick­ly,” Col­in Sebas­t­ian, an ana­lyst at Baird, told CNN. 

September 2018: Amazon announces it will acquire 20,000 last-mile vans

After announc­ing its DSP pro­gram, Ama­zon ordered some 5,000 Mer­cedes-Benz Sprint­er vans. 

Then, because there was so much pub­lic inter­est in the DSP pro­gram. the com­pa­ny acquired anoth­er 15,000. 

“We’ve been real­ly blown away by the num­ber of peo­ple who approached us,” Dave Clark, Ama­zon senior vice pres­i­dent of world­wide oper­a­tions, told CNN­Money. “We expect­ed a lot of inter­est but the sheer vol­ume — the tens of thou­sands of peo­ple who actu­al­ly went all the way through the process to make them­selves eli­gi­ble for the pro­gram — has been real­ly hum­bling.”

December 2018: Amazon adds 10 more planes, bringing the total to 50

Ama­zon announced days before Christ­mas that it would add anoth­er 10 car­go jets to its air car­go net­work. 

It was the lat­est announce­ment from Ama­zon that sig­nals just how keen the e‑commerce jug­ger­naut is on expand­ing its own air ship­ping capa­bil­i­ties, rather than rely­ing on UPS, FedEx, USPS, and the like.

The pre­vi­ous week, Ama­zon announced it will expand its 72,000-square-foot car­go facil­i­ty at Chica­go Rock­ford Inter­na­tion­al Air­port to 200,000 square feet. It also announced that last week it would build a new region­al hub at Fort Worth Alliance Air­port, and a new sort­ing facil­i­ty in Ohio’s Wilm­ing­ton Air Park.

February 2019: Amazon declares itself a transportation company

In Jan­u­ary 2019, UPS CEO David Abney told Busi­ness Insid­er that he “mon­i­tors” Ama­zon as a com­peti­tor. It was the first time the CEO said Ama­zon was a com­peti­tor, not just a good cus­tomer. 

Read more: UPS CEO David Abney has final­ly admit­ted that he sees Ama­zon as a com­peti­tor

A week lat­er, Ama­zon con­firmed Abney’s strat­e­gy. The com­pa­ny added, for the first time, a line in its annu­al finan­cial fil­ing that it was a “trans­porta­tion and logis­tics ser­vices” com­pa­ny.

At the time, Ama­zon had just expand­ed Ama­zon Ship­ping (pre­vi­ous­ly “Ship­ping with Ama­zon”) to the New York area. The ser­vice, already in Los Ange­les and Lon­don, nixed fuel sur­charges and oth­er fees that FedEx and UPS place on its goods.

June 2019: Amazon adds another 15 planes

Ama­zon said it would have 70 planes by 2021. 

“These new air­craft cre­ate addi­tion­al capac­i­ty for Ama­zon Air, build­ing on the invest­ment in our Prime Free One-Day pro­gram,” Dave Clark, Senior Vice Pres­i­dent of World­wide Oper­a­tions at Ama­zon, said in a press release. 

July 2019: Amazon adds another 2,000 delivery vans

Busi­ness Insid­er report­ed that the e‑commerce giant bought 2,000 vans from Michi­gan-based spe­cial­ty vehi­cle com­pa­ny Spar­tan. 

These “step vans” are larg­er than its Mer­cedes-Benz Sprint­er vans and can hold more car­go.

“It would log­i­cal for them to be pro­vid­ing step vans,” Satish Jin­del, the pres­i­dent and prin­ci­pal con­sul­tant at SJ Con­sult­ing Group, told Busi­ness Insid­er. “As they are rapid­ly absorb­ing more and more pack­ages that they ship, they know the cube of the Mer­cedes van will be a lim­i­ta­tion.”

September 2019: Amazon announces it will acquire 100,000 delivery vans from Rivian

Ama­zon ordered 100,000 elec­tric deliv­ery vans from the elec­tric-vehi­cle start­up Riv­ian, which it also invest­ed in. The first vans will be ready by 2021.

Last-mile vehi­cles are an easy way for Ama­zon to green its sup­ply chain, and it pro­vides a way for Ama­zon to avoid exces­sive repairs. 

October 2019: Amazon rolls out branded tractors

Busi­ness Insid­er report­ed that Ama­zon was match­ing its brand­ed trail­ers with brand­ed trac­tors. Vol­vo and Ken­worth man­u­fac­tured the trac­tors. 

The trac­tors are what are known as “day cabs,” rather than “sleep­er cabs,” indi­cat­ing that the dri­vers in the trucks won’t sleep there. So, the trucks will be used for dis­tances 400 miles or short­er, SJ Con­sult­ing Group’s prin­ci­pal con­sul­tant Satish Jin­del said.

December 2019: Amazon says it will deliver 3.5 billion packages in 2019

Ama­zon end­ed its wild decade becom­ing a logis­tics com­pa­ny with an impor­tant mile­stone: it would deliv­er 3.5 bil­lion pack­ages in 2019.

It sig­ni­fied that Ama­zon was now its biggest deliv­er­er — not UPS, US Postal Ser­vice, or FedEx. 

And that was, per­haps, what Ama­zon was striv­ing for all along.