Amazon Will Put UPS Out of Business

-edited

Amazon's new robot packs 600+ boxes per hour vs humans at under 200. With that announcement comes a $10K offer to quit.

Lights Out Warehouse

Please consider New Amazon Machines Pack 600 Orders Per Hour, Could Replace Thousands of Jobs.

The new machines, known as the CartonWrap from Italian firm CMC Srl, pack much faster than humans. They crank out 600 to 700 boxes per hour, or four to five times the rate of a human packer, the sources said. The machines require one person to load customer orders, another to stock cardboard and glue and a technician to fix jams on occasion.

Including other machines known as the “SmartPac,” which the company rolled out recently to mail items in patented envelopes, Amazon’s technology suite will be able to automate a majority of its human packers. Five rows of workers at a facility can turn into two, supplemented by two CMC machines and one SmartPac, the person said.

Amazon is not alone in testing CMC’s packing technology. JD.com Inc and Shutterfly Inc have used the machines as well, the companies said, as has Walmart Inc, according to a person familiar with its pilot.

“A ‘lights out’ warehouse is ultimately the goal."

Machine in Action

Opportunity to Quit

TechCrunch reports Amazon Offers Employees $10K and 3 Months Pay If They Quit

But there's a catch. They have to start their own delivery business instead.

The retailer says it will fund startup costs up to $10,000, as well as the equivalent of three months of the former employee’s last gross salary, to give the employees the ability to get their new business off the ground without worrying about a break in pay.

Amazon said last year that people were able to start their own delivery business with only $10,000. At the time, military veterans were able to get that $10K reimbursed, as Amazon was investing a million into a program that funded their startup costs.

Employees — or any other entrepreneur — who wants to become a delivery partner, are able to lease customized blue delivery vans with the Amazon smile logo on the side, and take advantage of other discounts, including fuel, insurance, branded uniforms and more.

Delivery partners, meanwhile, could earn as much as $300,000 in annual profit by growing their fleet to 40 vehicles, Amazon claims. The company said last year it expected that hundreds of small business owners will come to hire tens of thousands of drivers across the U.S.

Directly Competing With UPS, FedX

It's clear where this is headed: Amazon will directly compete with UPS and FedX.

If Amazon can offer retailers reduced costs and faster delivery, why wouldn't businesses take it?

Real Example

Consider what happened to me two weekends ago. I was at Arches and Canyonlands National Parks, staying at hotel in Moab, Utah.

A star tracker that I use for photographing the night sky broke. I wanted another ASAP and paid $50 extra for overnight delivery. I placed the order Thursday morning at 9:00 AM. I should have received it Friday, but didn't.

UPS does not deliver on Saturday. Prime does. I did not get my star tracker until Monday. I lost three days of being able to photograph the night sky the way I wanted.

These camera stores offer free 2-day shipping on most items.

If and when Amazon offers a deal to such places, they may be able to free one day shipping or save money on two-day shipping.

Mish Moments

Please check out my Photography Website: Mish Moments.

Union vs Non-Union

UPS is union-based with union costs and pension costs.

UPS is the single largest employer in the Teamsters Union. The UPS contract is the largest collective bargaining agreement in North America.

UPS will not be able to compete with Amazon on costs. UPS is doomed.

Mike "Mish" Shedlock

Comments
No. 1-25
Tengen
Tengen

Labor shortage, my eye. Eventually the BLS will tell us that 200M Americans are out of the labor force, yet unemployment is 2%.

Get rid of the $1T+ deficits and it would be 300M without all the pork laden MIC/government gigs.

Kenautical
Kenautical

And here is the machine that is displacing these people -

OldEngineer
OldEngineer

I'm not as confident about Amazon's ability to wipe out UPS. I personally cringe when I buy something from Amazon and the tracking indicates that it will be delivered by their in-house people. Those are the packages that end up at the wrong house, or that don't get delivered because "they can't find a safe location to leave it." (Hint: Perhaps you could place it NEXT to the package that another Amazon driver left on my doorstep earlier that day?)

One of my neighbors went through a month-long period where every single Amazon package that was delivered by Amazon's in-house people ended up at a house almost two blocks away. Apparently Amazon's policy was that the driver MUST deliver the package the house that their Amazon app directs them to, even if it's obviously the wrong house. All they knew was that a lot of their packages weren't being delivered, until the people at the other house arrived home and found a pile of somebody else's packages on their doorstep.

Yes, UPS drivers are unionized. UPS drivers are probably making three times as much as the Amazon drivers. I couldn't tell you the last time I had to deal with a mis-delivered package handled by UPS. If I had any say in the matter, I would pay extra to get my packages delivered by UPS instead of Amazon's contract-slave labor. (Not to mention almost getting mowed down in a crosswalk by an Amazon van running a red light.)

Aaaal
Aaaal

When automation has 'retired' the human workforce who but the ultra elite will have any money to buy anything? There will be no customer base left for AMZN to sell anything to.

Tobinfrost
Tobinfrost

Still not sure how that automation will put ups or FedEx for that matter out of business.....so it packs merchandise, great. Unless you go to a ups store or a customer counter ups really doesn't pack your stuff they pick up and deliver what you or your business has already packed and deliver ot for you. Yes Amazon has a much cheaper work force...no question and they aren't going anywhere. But internet shopping is going nowhere but up and at the end of the day there is way to much business for any one company to deal with. And as far as ups is concerned I'll always support a unionized work force over that smiling third world country pay structure any day.