Amazon buys Mercedes-Benz vans for its delivery program

Amazon is focusing on its new delivery program.

The retailer said Wednesday it would buy 20,000 Mercedes-Benz Sprinter vans for use as part of its new local delivery initiative, which says it will pay contractors to start small businesses to deliver their parcels. .

Amazon announced the program in June, promising annual profits of $ 300,000 for entrepreneurs wishing to start businesses and hiring up to 100 drivers for a fleet of 40 delivery vehicles. The new vans will not be owned and managed by Amazon, but by a fleet company that will in turn lease the new delivery companies.

However, the vans will carry the Amazon brand and the premium blue logo.

The new purchase fits into the retailer's plan which plans to rely less on incumbent operators such as UPS, FedEx and US Postal Service, by helping to finance small businesses. The number of vans in the order is still much lower than the number of vehicles in the fleets operated by UPS, indicating that it has about 119,000 vehicles worldwide and FedEx, which has more than 100,000 FedEx Express vehicles and more than 60,000 FedEx Ground. Vehicles.

An Amazon representative told the Wall Street Journal that the company had received "tens of thousands" of applications for the new program, but should select about 500 to get started.

Dave Clark, vice president of global operations at Amazon, said in a joint statement with Mercedes-Benz that the order of 20,000 vehicles represented an increase over the initial order due to "the formidable response".

Amazon is already working with hundreds of third-party logistics companies to help deliver parcels quickly as part of its Promised Delivery promise. The new vans are a major step in the way that Amazon creates its own distribution network and becomes less dependent on other delivery companies.

The high shipping costs of Amazon are a good reason to try to exercise greater control over one of the most important parts of its business. These costs have nearly doubled in two years, from $ 11.5 billion in 2015 to $ 21.7 billion last year, the company said in a 10,000-subject filing at the Securities and Exchange Commission. earlier this year.