In recent months, Amazon ended its contracts with several small courier companies, resulting in the dismissal of more than 1,200 delivery drivers.
According to reports, Amazon recently ended its cooperation with at least seven small courier companies, resulting in about 1,205 delivery drivers being fired and related facilities shutting down.
These small express companies are part of Amazon’s “Express Service Partner Program” (DSP). As early as June 2018, Amazon launched the DSP program to solve the “last mile” delivery problem.
The DSP program allows American entrepreneurs to operate their own truck network, but they can be labeled with Amazon’s “Prime” logo. This can inspire entrepreneurs to build their own small express business. Amazon said at the time that entrepreneurs can build their own express business with a minimum of US$10,000 . Of course, this does not include the cost of hiring a driver.
Amazon’s senior vice president of global operations, Dave Clark, said: “Owning 40 trucks can make a maximum of $300,000 per year.” Clark also predicts that a fleet of 20 to 40 trucks will generally Need to hire about 100 drivers.
Now, Amazon has ended its cooperation with some DSP express companies, causing them to close their stores and announce layoffs. It is reported that Courier Distribution Systems, a courier partner in Georgia, will lay off 273 drivers in Pennsylvania and Wisconsin. The Massachusetts-based Systemize logistics company is closing branches in Connecticut and New York, laying off 121 employees.
In addition, Maryland-based TL Transportation is laying off 80 employees in Pennsylvania and closing a facility in New York, resulting in 76 layoffs. Prime EFS, headquartered in New Jersey, was forced to fire 338 employees in the state and Pennsylvania.
In addition, JST Transportation laid off 51 jobs in Massachusetts, Deliveryol Global laid off 41 jobs in Pennsylvania, and Sheffield Express laid off 95 jobs in Connecticut and will close facilities there.
In response, an Amazon spokesperson said in a statement that the company regularly evaluates its express partnerships. In another round of layoffs that began in February, Amazon also terminated contracts with Transportation Brokerage Specialists, Bear Down Logistics, Express Parcel Service, Delivery Force, and several other companies, resulting in at least 2,000 layoffs.
Although Amazon ended its cooperation with several underperforming delivery partners this time, its DSP program has grown rapidly since its launch two years ago. Amazon stated in a blog post earlier this month that the current number of DSP partners has reached more than 1,300. They come from five countries, created 85,000 jobs, and delivered more than 1.8 billion packages worldwide.
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