The tech giant could soon be handling 70 percent of its own deliveries.
Our insatiable desire for online shopping has left automotive bosses smiling. Last year, Amazon created its in-house delivery network and already has a 30,000-strong fleet of delivery trucks. According to a report from The Detroit News, fleet sales - including governments and car rental agencies - have already surpassed 2.6 million units through November this year.
The sale of delivery vans is only set to gather pace, according to Evan Armstrong, president of Armstrong & Associates, a logistics research and consulting firm.
"A lot of those vans are going to build out Amazon's small-package delivery in metro areas," he said. "There's going to be an opportunity because e-commerce is growing so fast, and these networks are growing as well."
Amazon has bolstered its own door-to-door delivery rates after solely relying on United Parcel Service Inc, FedEx Corp, and the US Postal Service. A larger percentage of deliveries are now outsourced to independent contractors, while bulk buying of vehicles equates to savings on fuel and insurance.
Next year, according to SJ Consulting Group, Amazon is expected to take care of 70 percent of its own deliveries. Contributing to the shift is the Seattle company's opinion that FedEx's performance has been on a downward path in recent times.
It all means that automakers like Mercedes-Benz, Fiat Chrysler, and Ford are seeing burgeoning sales of their vans. For instance, Fiat Chrysler delivered 25 percent more of its Ram ProMaster and ProMaster City vans through September. Mercedes van deliveries are up 2.9 percent this year (after a 9.1% jump last year), with an Amazon order of 20,000 Sprinter vans being announced in 2018.
The electric vehicle market is set to benefit, too, as Amazon intends to order 100,000 vans from new EV automaker Rivian. The initial batch of these vans is likely to be delivering online orders from 2021 and contribute to overall commercial vehicle sales (which already saw an 8.7 percent jump through November of this year).
Of course, with Amazon's branded fleet ballooning comes more business for auto repair dealers and service centers as well. Steve Germain is the owner of a dealer group servicing Mercedes and Ford vehicles in Florida, Michigan, and Ohio.
"We're seeing a lot of increase in servicing activity due to Amazon and other retailers," he said. "It's important for them to get back in service as soon as possible, so it's great business for us."