Amazon is 'more prepared than ever' to deliver packages without the post office


Amazon, in the crosshairs of President Donald Trump’s Twitter ire, is more prepared than ever to deliver packages without the United States Postal Service.

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7 shock-worthy facts about Amazon
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7 shock-worthy facts about Amazon
7.5 percent of Seattle's working-age population are Amazon employees

Amazon has more than 300,000 employees worldwide, and 40,000 in Seattle alone.

As a portion of the city's working-age population — roughly 528,000 — that comes out to 7.5% of the city working at Amazon.

For perspective, if the same portion of New York City's adults worked for one company, that company would have about 488,000 locals on staff.

Amazon accounts for 43% of all online sales

Amazon used to be a way to buy books online; today, it's the default buying site for just about everything, especially for people who have Amazon Prime.

An analysis by Slice Intelligence released in February found that 43% of all US online retail sales were done through Amazon in 2016.

That's up from 33% in 2015 and 25% in 2012.

1 out of every 4 US adults has Amazon Prime.

Speaking of Amazon Prime, the company now counts approximately 63 million people among its subscriber base, or about 25% of the total US adult population.

That number may underestimate the true coverage, however, since it doesn't account for multiple adults in one household all sharing the same Prime account.

Amazon ships 1.6 million packages a day

Amazon fulfillment is a beast of its own.

A report from 2013 (the latest year for which data are available) found Amazon shipped 608 million packages that year, or 1.6 million packages a day.

As of 2015, Amazon estimated its fulfillment centers were within 20 miles of 31% of the US population, and within 20 miles of 50-65% of its core, same-day-accessible market.

That's enough cardboard to span all of West Virginia

A back-of-the-envelope calculation reveals all those packages (not including padded envelopes) yield roughly 26,400 square miles of cardboard.

The total land area of West Virginia, meanwhile, is just north of 24,000 square miles.

Given the speed of Amazon's shipments, the company could blanket the whole US in cardboard in about five months.

45,000 robots roam the floors of Amazon's warehouses

To help those shipments leave the warehouses on time, Amazon relies on a growing fleet of autonomous robots that fetch packages from their shelves and bring them to human employees.

The 45,000 robots live across 20 fulfillment centers in the US. In 2016, the company increased the fleet 50% from its prior head count of 30,000.

Amazon is more valuable than all major brick-and-mortar retailers combined

The sum total of those investments in infrastructure and supply chain management have made Amazon by far the most valuable retailer in the United States.

Amazon's $356 billion valuation is so big, it's larger than Wal-Mart, Target, Best Buy, Macy's, Kohl's, JCPenney, and Sears combined.

With the recent acquisition of Whole Foods, there are no signs the retailer has any plans of slowing down.

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"We believe Amazon is more prepared than ever to move on from its arrangement with the USPS if it had to,” D.A. Davidson analyst Tom Forte said in a note to clients Thursday. "Given its increasing first-party logistics assets (including its air freight effort, trucking capabilities, and Prime Now short-time shipping efforts)."

Trump has repeatedly lashed out against the e-commerce giant for not paying its fair share to USPS for delivering its packages. Neither the agency nor the company have disclosed the rates Amazon pays for parcel delivery, but it likely gets a discount given its volume.

To be sure, however, Amazon would have to make significant investments in its delivery infrastructure in order to leave the USPS completely. Only 9%, or 116 million, packages are delivered by carriers other than the post office, logistics consultant Marc Wulfraat estimated earlier this month. He says its unlikely Amazon can increase that number to the required 62% anytime soon, especially as UPS and FedEx struggle with their own capacity issues.

"The most significant matter, in our view, is its contract with the USPS, which we have described as a sweetheart deal, because it is very unlikely that Amazon could forge one with similar economics with FedEx and/or UPS, or, even, regional carriers, such as LaserShip (for the Northeast) and OnTrac (for the West)," Forte said.

Amazon is scheduled to report earnings next Thursday, April 26. Analysts polled by Bloomberg expect the company to have earned $3.09 per share on revenues of $49.94 billion. They also expect company leadership to be asked about the ongoing attacks by Trump, though CEO Jeff Bezos didn’t mention criticisms in his letter to shareholders Wednesday. 

"On the call, we will be listening for management’s responses to President Trump’s much publicized criticism of the company (including its sweetheart deal with the USPS)," Forte said.

Shares of Amazon are up 2% Thursday after Bezos' letter to shareholders released Wednesday disclosed for the first time there are a whopping 100 million paying Prime customers.

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