Amazon is the world’s leading retail e-commerce platform, and the company employs logistical companies like USPS, UPS, and FedEx to perform the delivery process. There is no doubt Amazon has established a very efficient and effective supply chain and logistical system, but disruption and challenges are bound to happen. Today, we’ll discuss the top Amazon logistics issues.
Before discussing Amazon logistics challenges, it is significant to mention some of the keynotes about the world’s leading retail e-commerce platform.
- Amazon has established a very large logistical and delivery network comprising 20,000 distribution centers and vans, and 70 cargo planes
- The platform manages roundabout 67% of its deliveries
- Logistical partners of the platform are USPS, UPS, and FedEx
- Amazon has achieved the status of the US fourth fourth-largest logistical and delivery service-providing firm
Top Amazon Logistics Issues
Some of the top Amazon logistics issues and challenges are as follows;
The last-mile delivery service is facing the friction and challenge of communicating with customers. The e-commerce platform heavily relies on a visible and transparent network and processes, but establishing a smooth flow of communication between drivers and customers is difficult. Sometimes, the support line becomes overloaded so much that it is not possible to answer all the queries and questions.
Visibility & Transparency
While shipping massive deliveries, it is significant for Amazon to have the transparency and visibility of all the delivery packages and items in the logistical process. It means that the e-commerce platform should have information on all the packages on various trucks, and their exact location in real-time.
However, the key element of visibility and transparency is the capability of customer to be aware of it in real-time on their browser or smartphone. A map would show them the location of the driver or package, and when it would reach them. The customers should have the option to directly communicate with the drivers and share their overall experience after the completion of the delivery. Amazon offers a real-time visibility feature to its customers.
Amazon AWS is also the world’s leading cloud computing service-providing platform. The mass volume of traffic that the e-commerce platform receives on Amazon Prime Day could overload the platform. Many customers complained a few years ago that the checkout page couldn’t load up on the prime day. Amazon has successfully managed and dealt with the tech and bandwidth issues over the years, but it could jeopardize the company’s reputation.
Resources for High Delivery Needs
Amazon experienced the last-mile delivery challenge for packages during the mass-volume sale season or days like Christmas or Black Friday. For instance, the e-commerce platform faced many logistical failures during Christmas 2013; many customers didn’t receive their packages on time. Amazon has taken various steps to make sure the efficiency of the last-mile delivery service.
A leaked document from Amazon showed the company’s “Operation Dragonboat” plan outlining how the company would win the last mile by becoming an independent shipping company as its unit. They proved to be right over the years, and nowadays the company manages more than 70% of its deliveries independently and internally.
Supply & Demand Balance
Many marketing experts have criticized the e-commerce platform Amazon for its operational limitations on Amazon Prime Day. The incorrect and wrong demand forecasting resulted in the form of quick sale out of the stock and items; many customers couldn’t take advantage of the sale. In order to satisfy the customer demands and expectations, the company plans to offer a great selection of items and an increased inventory level.
The last mile delivery service during the peak shopping and holiday seasons, the company experiences logistical issues. It results in the form of unsatisfied and unhappy customers because they couldn’t receive their orders on time or faced the stock out problem. Amazon has successfully resolved many issues relevant to last-mile delivery to improve the customer experience and satisfaction level.
The other problem Amazon faced was that packages were lost in the mass volume of products. The company has greatly reduced and managed the problem with robotic technology and computerized labeling and tagging. However the risk of product loss is still there, and the company timely plans to deal with the problem by compensating the seller for the lost item. However, the company decides the amount of lost item, rather than the amount the customer or seller spend on it.
Product delay is a serious issue and it happens because the company needs to record all the items in its inventory system. It results in the form of delay for the delivery of the package. The package delay would directly and negatively impact the customer experience and satisfaction level.
Conclusion: Amazon Logistics Issues
After an in-depth study of the Amazon logistics issues; we have realized that Amazon is the world’s leading retail e-commerce platform. If you are learning about the logistics challenges of Amazon, then you should keep in mind the abovementioned issues and problems.
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