The quest to own more of its delivery chain has definitely not come cheaply. Just this year, Amazon reported a nearly 50% increase in its fulfillment and shipping costs (a total of $9.6 billion) over a three month period (June - September). Remarkably, Amazon is managing to increase the number of packages it delivers as well as the speed it takes to deliver them. This year, for example, Amazon began testing a shift from Prime two-day shipping to one-day shipping. Traditionally, the last mile of a package delivery is not only the most expensive for retail organizations but also the hardest for them to handle themselves. Amazon has launched numerous initiatives, such as Prime Air and Amazon Flex to meet the needs of their logistics goals.
- Prime Air, launched in 2016, encompasses Amazon's cargo planes as well as the development of its drone delivery service.
- Amazon Flex is an on demand platform for independent contractors to pick up and complete Amazon deliveries.
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