Story by: Mark Solomon @ FreightWaves I
Amazon.com. Inc. (NASDAQ:AMZN) is preparing to take a step that many thought would be inevitable – acquiring its own power units.
Amazon, which has spent the past six years forming a massive shipping and logistics network, already owns or leases thousands of truck trailers. But it relies on contractors to bring their own power units to the shipping relationship. That is changing. The company is poised to “double down” on its in-house truckload capabilities and is ready to jettison many of its contractors if necessary, according to a person familiar with the company’s plans.
Medium and heavy-duty truck manufacturer Volvo Trucks, a unit of Swedish manufacturer AB Volvo (OTCMKTS:VOLVF), confirmed October 11 that Amazon is a customer. In addition, Kenworth Inc. is reportedly building power units for Amazon. A Kenworth spokesperson declined to comment, deferring instead to its customers to respond to such queries.
Amazon did not reply to a request for comment. However, in mid-April, the company posted a video on Twitter showing two tractor-trailers with the familiar Amazon logo on the sides rolling up next to an Amazon-branded aircraft. Dave Clark, who heads Amazon’s global supply chain operations, said in the video caption, “Say hello to my little friend.”
The power units in the video were so-called “day cabs” designed to allow drivers to execute short-range pick-ups and deliveries within the federal driver hours-of-service (HOS) requirements. Amazon has been beefing up its network that supports what is known as the “middle-mile,” which, in Amazon’s case, would link its fulfillment and delivery centers. Amazon has 457 U.S. facilities and 58 more on the drawing board, according to consultancy MWPVL International. Of the 457 locations, 160 are classified as fulfillment, supplemental and return centers, and an additional 151 are delivery stations, according to MWPVL data. According to Salomon’s article.
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