Amazon.com Inc. will no longer be doing business with small delivery companies around the country -- rendering some 1,300 workers jobless -- in a move to streamline operations and keep only those who are conforming to company policies.
Bear Down Logistics, a delivery company based in Illinois that quickly grew in the last two years, is closing down operations in five key states and ending its contract with around 400 drivers.
Since Amazon no longer has ties with FedEx or United Parcel Service, an opportunity arose for smaller firms to offer their services with the delivery giant. Amazon's latest move only shows the company's strict standards that apply to all its partners in the business. Failure to meet its standards means the end of the contract.
Cargo hubs in Minnesota, Virginia, Ohio, and Illinois will cease operations starting April, and approximately 280 personnel will get the pink slip. Some 120 workers will become unemployed when a Michigan facility shuts down. A facility in Wisconsin, whose status is yet unclear, will also close down.
In Washington, Delivery Force will let go of 272 drivers, in Seattle, and other cities. Kansas-headquartered RCX Logistics, Amazon's delivery partner with branches in Alabama, Florida, and Texas, will cut the positions of over 600 workers after ending its contract with Amazon.
According to an Amazon spokesperson, as cited by Bloomberg, the company has a "responsibility to customers and the communities where we operate to make sure these delivery partners meet our high standards for safety and working conditions."
Amazon's decision accentuates the hurdles of outsourcing to new, untested delivery firms instead of traditional partners like FedEx and UPS. The company's actions also serve as a warning to delivery partners that it means serious business and will not hesitate to sever ties with them.
Amazon's program to tie up with smaller delivery firms began in 2018, and more than 800 companies showed their interest as a result. Amazon can deal with smaller firms easier and keep operational expenditures at a minimum. A worker at Bear Down Logistics disclosed to Bloomberg that he earns $15 per hour, compared to $20 that he makes with UPS.
One of the challenges that Amazon faces is balancing safety in its operations to deliver packages efficiently and fast, at the lowest possible cost.
Based on records released by ProPublica last December, it showed that Amazon put so much premium on speed than safety in its deliveries, which opened up other scrutiny that bared the injuries and deaths in the company's hasty expansion of its delivery system.
