'This is just another piece of the puzzle': Amazon is now rolling out branded tractors in its latest move to become a full-fledged trucking company
- Amazon is rolling out a fleet of branded truck tractors. Since 2015, Amazon has used branded trailers.
- Volvo and Kenworth are manufacturing the trucks.
- Experts told Business Insider that it's a sign Amazon might start directly employing truck drivers - a move from contracting with independent truck drivers and small companies.
- It's a major threat to the US Postal Service and large trucking companies, analysts said.
- Visit Business Insider's homepage for more stories.
Amazon is rolling out a fleet of branded truck tractors in its latest move to become a full-fledged logistics company, Business Insider has learned. Volvo and Kenworth are manufacturing the tractors.It's not known how many trucks are being made or when they'll be released. But, across the country, truckers said they've spotted these tractors at Volvo and Kenworth.Advertisement
Amazon confirmed the news, and referenced an April 15 video posted on Twitter by Dave Clark, Amazon senior vice president of operations. The video shows a Volvo and Kenworth tractor with an Amazon-branded trailer:
A Kenworth spokesperson declined to comment. Volvo did not respond to Business Insider's requests for comment.Amazon has signaled its interest to become a logistics giant. In the span of several years, the retail giant has amassed dozens of cargo jets, around 10,000 truck trailers, a network of ocean freighters, and thousands of last-mile delivery vans. Most recently, Amazon announced a massive order of 100,000 electricity delivery vans in Sept.
"They've already got branded airplanes. they've got a last-mile delivery network that's growing they've got branded trailers - one of the only things left is tractors," Cathy Morrow Roberson, founder of consulting firm Logistics Trends & Insights, told Business Insider. "This is just another piece of the puzzle."Read more: Amazon has quietly ordered 2,000-plus vans to deliver your Prime packages - and UPS and the Postal Service should feel stressedMany experts say Amazon is building up a network that could some day compete with UPS or FedEx. "It appears likely Amazon will move to a broader package delivery offering in the US over time, which remains a meaningful long term risk for UPS and FDX," UBS analyst Thomas Wadewitz wrote in an analyst note earlier this year. Advertisement
Since 2015, Amazon has used branded trailers to move goods nationwide. Those trailers are attached to a tractor of another trucking company or an independent truck driver.Advertisement
Amazon has been rapidly in-housing even more of its trucking needs this year, matching other massive jumps to in-source logistics services in air and last-mile delivery.
The trucking in-sourcing been a hit on several logistics companies that counted the e-commerce company as a leading customer. XPO Logistics, for instance, announced in Feb. that its largest customer was moving away from outsourcing to XPO, and the customer's in-housing would ultimately slash $600 million in expected revenues. (Analysts universally agree that the customer was Amazon, though XPO has not publicly stated such.)A $402 million trucking company went under in February, a bankruptcy that analysts said was partially because of Amazon's in-housing moves. Advertisement
"They've learned from others, they've pulled their business from them, and they're going to do it on their own now," Roberson said. "That's just how they go."
Amazon may be hiring its own troop of truckers
The branded tractors may be a sign that Amazon is looking to directly employ truck drivers. SJ Consulting Group's principal consultant Satish Jindel said acquiring branded tractors is very uncommon unless the company is planning to hire truckers. Walmart, for instance, has some 8,600 company drivers driving goods in its branded tractor-trailers."The only time companies use branded tractors is if they're used by their own employee drivers," Jindel told Business Insider. "This is probably an indication that Amazon will have company drivers as opposed to independent drivers."Advertisement
That may complicate its ability to hire its own truckers. Daniel Lacroix, who is a director at a regional trucking company, told Business Insider that he wasn't interested in working with Amazon after seeing the rates offered.
"We didn't make it past the initial bid process because the rates were just ridiculous," Lacroix said. "I love Amazon. I get all of my stuff off of Amazon, but I don't want to do business with them."Read more: Truckers say Amazon's new logistics empire is being underpinned by low, 'ridiculous' rates - and some are refusing to work with them Advertisement
"It is another indication that Amazon is going to, in time, have a complete capability to handle all the transposition and distribution needs of its business and of its customers," Jindel said. "They know having logistics is a core competency to their retail business."
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