Recently, Small Business Trends Executive Editor Shawn Hessinger spoke with Brent Leary, Managing Partner at CRM Essentials, about his visit to Atlanta’s Amazon delivery station and the importance that small businesses play in the company’s last-mile service.
What is Amazon’s Last Mile Delivery?
First, let’s define what last mile delivery services mean for any readers who may not be aware of what it means.
The term refers to one of the last parts of the delivery process. It is when a package is transported from a transportation hub to its final destination, or in the case of the entity it is being delivered to, the consignee. The consignee is typically a retail store or a consumer’s personal residence.
So, Amazon manages the upstream process of this network until it reaches the node, which is their transportation hub. Small businesses will enter this part of the network to load and transport the goods on this last part of the journey or “last mile” to the consignee.
Amazon’s Delivery Station Reveals
Shawn Hessinger: So, Brent, tell us a bit about kind of what you did and how you wound up following packages around at Amazon.
Brent Leary: I was always fascinated with what they do. I gave them my attention, and they invited me to get an opportunity to look locally and see a behind-the-scenes view of the last mile here locally in the Atlanta metro area.
There, I got a chance to do a tour of what they call a delivery station, which is one of the facilities along the route of getting your stuff to you, which, you know, goes from fulfillment center to sorting facility to what I went to, which is a delivery station.
And they take those packages and basically prepare them for that last mile delivery by a delivery truck, which is performed by delivery service partners. These partners aren’t Amazon employees; they’re small businesses that Amazon works with to deliver your package.
How Small Businesses are Critical to the End of the Delivery Process
Shawn Hessinger: So many people talk about Amazon like it’s just this big corporation. But as we know, there are a lot of third-party sellers. You talked about how you saw in this ecosystem that small businesses are part of this whole process.
Brent Leary: The Atlanta delivery station facility I got a chance to peek behind the curtain at was 250,000 square feet! While there, I saw there are different components to the process:
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- First, there’s “Under the Roof” where the packages are taken off the trucks and brought underneath the facility for processing.
- Once that processing is done, there is packing, which they call inducting–putting things in packages to ship, putting them in a sorting bin and getting them ready for the delivery service partners to come in and take the packages.
- Finally, the partners put them on their trucks and take them out for delivery.
Now, before all that takes place, they have fulfillment centers. Selling partners doing fulfillment by Amazon have stuff they sell that go into those facilities.
And then once somebody hits the buy button, it goes from a fulfillment center to a sorting facility. Once it goes from there, it gets delivered to any number of delivery stations. The delivery station processes it to the point where it’s ready to get put on a truck. And the truck, at least in the instance where I was, has seven delivery service partners with which Amazon and this facility work.
Each one of those partners has multiple drivers who go to the business. So, every morning, which I think is 9:50 am to like 11:30 am, a set of those delivery service partners come in. For 20 minutes, they have an opportunity to load up all their stuff and hit the road. Then, another delivery service partner brings all their trucks in and goes through the same process. And once it gets on the truck, it’s out there and it’s getting delivered.
Small Businesses are also Important at the Beginning of the Fulfillment Process
Shawn Hessinger: It sounds like you are saying small businesses are at the beginning of the process because they’re selling and have stuff queued up in Amazon warehouses—and that they are also at the end of the process when it comes to delivering goods to customers.
Brent Leary: Yes, I think you’re right about that. You think about sellers that…not only are they selling on the platform… but they’re having a certain number of them also using the fulfillment by Amazon service. Therefore, their inventory is sitting at one of these fulfillment centers, so it’s easier and more efficient to go from somebody buying it to bam! now, it’s already in an Amazon facility.
So, it kind of streamlines the process of getting that product out to the customer. But those delivery service partners there are small businesses. I think it’s a service in a relationship that Amazon invested in…I think, going back to 2018. And so, I think there’s about 3000 or so, where maybe just the U.S. portion is these delivery service partners.
And, you know, me personally, my experience last week, this one delivery station in Atlanta, and there are multiple delivery stations throughout the state. But I went to one of them, and then each one of those stations has a set of delivery service partners that it works with. So–once that package gets processed, it comes in from fulfillment and sorting and goes into the delivery station gets processed, and then it’s ready to go out.
Once it comes out, it’s being handled by a delivery service partner, which is a non-Amazon employee. So, there are seven that this particular facility works with…seven small businesses that are delivery service partners.
And each one of those has multiple drivers. So, they bring them all in at once. The delivery service partner 1 comes in at 9:50–seven or eight of those are trucks that belong to that delivery service. But they all come in and they can be all sizes…could be vans…could be big trucks, but they have 20 minutes to load each one of those vehicles for that particular service partner so that they can hit the road and get out there delivering stuff.
Interviews with Amazon’s Operational Management
Shawn Hessinger: You did some interviews while there, which is great. Can you set up the first interview we have here, who we’re talking to and kind of what they’re talking about?
Brent Leary: On this tour, I had two tour guides. The first of which I’m going to call her by her nickname “YoYo Johnson” because that’s what everybody called her. She’s the Operational Manager for that facility. She did a great job taking me through what was happening on the inside.
Shawn Hessinger: Let’s watch that video now. Then we’ll come back and talk about the next interview you did.
YoYo Johnson (transcript from the video):
We are currently on our launch pad. We do operate two different launchpads simultaneously here at DGT-8 and on the launch pad is where the magic happens.
We have our delivery service partners. They have their drivers pulling up onto the launch pad in their vehicles. And once they get on to the launch pad, we have an entire process that we go through to make sure we’re maintaining safety at all times on the pad. So to my right, you will see our queuing location before drivers actually get onto the launch pad. And then they’re released to come on to the launch pad by a traffic controller.
That person will, quite literally, control the flow of traffic coming onto the launch pad and make sure that no drivers exit the vehicle until we have the all-clear, every single vehicle is stopped. There are no people or products on the launch pad, and we make sure everything is clear to go. Once we have that all clear, our drivers have 20 minutes from the time that they get onto the launch pad to load their entire vehicle with their full route and exit the launch pad to start their dispatch process for delivering packages.
Amazon’s Last Mile Service in Action
Shawn Hessinger: Next, we hear from Ross Kirkpatrick, Operations Manager at Amazon Logistics, about the process by which Amazon delivery partners load packages for the last mile of their journey to the customer’s front door.
Ross Kirkpatrick (transcript from the video):
It’s pretty interesting the way the staging works. Our Under the Roof Team actually stages the packages to where you’ll see our totes. What we call a tote it’s going to be a bin with multiple packages within those totes. They will load those first in a specific order.
So, we under the roof, take that route backwards, so that it’s more efficient for the drivers to deliver forwards on road. So, basically working the system backwards to drive more efficiency on road. So, as you’ll see, drivers will first put that cart by their van and then they’ll load in a specific order which their flex app actually shows in real-time. So it gives them step-by-step, hey, this will be, for example, your first tote will be 457 blue like this first driver has in the first route. So [it’s] very important that we can drive efficiency.
Shawn Hessinger: And Brent, set up this last clip for us.
Brent Leary: This is one that caught my interest as I was talking to Ross. He mentioned that if you’re if you are using the Amazon app, you can actually find out all sorts of notifications, such as getting notified when you are the next up in line to get delivered.
Ross Kirkpatrick (transcript from the video):
We try to give our customers that 360-degree view…consistent updates throughout the life of the package, so they understand when they’re going to be receiving their package, right? So, there’s actually updates those customers will receive on their Amazon app, as well, if they had the notifications turned on for updates for their delivery process. They’ll even be updated for when the package leaves the fulfillment center, and when it’s heading to our delivery station.
So, it updates that delivery time. And then also if a driver has that delivery next, it will notify the customer: you are next for the next stop of that driver’s route to basically proactively, proactively allow that customer to prepare for that delivery, to receive that package from that customer, and then also safely be able to retrieve that package at the time of that delivery.
The Takeaways
Looking at the example we have here about last mile service, one business tip we can suggest is that you consider partnering with a larger business when starting out. That will give you reach and resources you might never have had otherwise have been to grow your business faster than you ever thought possible.
If you enjoyed learning about how small businesses can provide last mile services, you may enjoy reading Small Biz Trend’s post How to Start an Amazon DSP Business. It takes you through everything you want to know about how to start and run your own package delivery business.
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