More recently, Amazon said it would invest $1.7 billion to expand its rural delivery network. The tech giant plans to invest $4 billion to improve package delivery options, focusing on bringing products closer to customers. Specifically, Amazon has made its two-day delivery a de facto minimum standard for many of its businesses. Today, the company has been making moves to reduce average delivery times down to one day or even a few hours.
The expansion primarily aims to reach communities and areas that other delivery and logistics providers tend to ignore. It has a laser focus on rural areas, where expensive service has kept most private sector companies from entering. Udit Madan, Amazon’s senior vice president of worldwide operations, emphasized the company’s commitment to these customers.
“At a time where many logistics providers are backing away from serving rural customers because of cost to serve, we are stepping up our investment to make their lives easier and better.” – Udit Madan, Amazon’s senior vice president of worldwide operations.
Amazon has announced plans to reduce its average delivery times by more than half. This daring plan fuels its aspiration to become the most far-reaching package delivery operation in the United States. By vertically integrating and investing deep into logistics, infrastructure, and technology, Amazon is going toe-to-toe with established competitors, like UPS and FedEx. By 2022, the company was reassuring investors of its commitment to meeting this aggressive goal.
The decision to expand services comes as they continue to operate under unprecedented scrutiny from all sides, including the White House. Recently, Amazon faced criticism for its reported plan to disclose how much of an item’s cost is attributed to tariffs. This transparency initiative has received both praise and criticism, but highlights the new nuances paving the road of e-commerce and logistics.
With this $1.5 billion investment, Amazon is more than ramping up its logistics capabilities. Concurrently, it is meeting the increasing public expectation for faster delivery and cut-off times. The corporation remains committed to building and maintaining opportunity in rural America. With this improvement, customers who previously had difficulty receiving their orders in a consistent and timely manner will see improved access.