Amazon challenges Australia Post in last mile deliveries, creating ‘hundreds of jobs’ in new contractor fleet

The US tech behemoth is challenging Australia Post’s long-held parcel delivery monopoly, promising faster and even free deliveries as it rolls out a new delivery fleet.

Delivery Service Partner vans will be co-branded with Amazon’s ‘smile’ logo.

Amazon is recruiting a fleet of contractors – launching its Delivery Service Partner program across three capital cities – as it challenges Australia Post’s monopoly, completing more of its own deliveries to customers.

The national postal service dominates Australia’s parcel delivery market, with more than 80 per cent market share. But the US tech titan is aiming to succeed where other foreign logistics companies have largely failed, making what is known as last mile deliveries more commercially viable.

Amazon will launch its Delivery Service Partner program initially in Sydney, Melbourne and Brisbane. It involves signing up small businesses, who typically operate a fleet of 20 to 40 vehicles, to deliver packages bought from Amazon’s online store and marketplace.

The launch of the Delivery Service Partner program – which is available in 19 countries – comes after Amazon expanded its free one-day delivery service for Prime customers to key regional areas last month, taking on a market previously dominated by Express Post.

Most companies, including Amazon, have used Australia Post’s network to offer services to most Australians. But Amazon is increasingly recruiting its own contractors to “speed up deliveries”. It has invested more than $500m in its last mile delivery network since it launched in Australia in late 2017.

Amazon Australia’s General Manager of Delivery and Supply Chain, Anthony Perizzolo, said encouraging more people to start their own delivery business, would create “hundreds of permanent jobs for delivery drivers”.

“We’ve continued to invest in our Australian operations to meet the needs of our customers. The expansion of our last mile network with DSP will enable us to continue meeting growing customer demand and enhancing delivery outcomes for customers,” Mr Perizzolo said.

Amazon vice president of transport Beryl Tomay, -who oversees the company’s last mile deliveries – said the program aimed to inject more entrepreneurship in the logistics market.

Amazon VP of Transport Beryl Tomay said the program aims to encourage people to start their own businesses.

“This program is all about empowering Amazon entrepreneurs to start their own delivery business, even if they have no logistics experience or very little logistics experience,” Ms Tomay said.

“What we’re able to provide is Amazon’s expertise within logistics, infrastructure support training technology. So these owners can go and hire and retain amazing teams, run their daily operations, manage their fleet, so that they can grow their own business and invest in their communities.”

The start-up cost to join the program is $30,000 and covers services including fleet and payroll management as well as insurance.

“We have a ton of technology that will aid them in running their own business. For example, their drivers get technology that has mapping functionality and routing functionality,” Ms Tomay said.

“We provide them with the services that they will need through … partnerships that we’ve created. We’re pretty proud of how low the barrier is and the relative low cost of the start-up investment that they have to make.”

The Delivery Service Partner program complements Amazon’s Flex scheme, which taps into the gig economy but instead of being paid per parcel delivery, drivers are paid in hourly blocks.

“We’re very much invested in continuing to speed up deliveries for our customers,” Ms Tomay said.

“Our last mile network plays a big role in that, and it’s quite diverse. Our Delivery Service Partner program will enable us to continue these investments for our customers and improving their delivery experience.”

Since its launch, Amazon Australia invested more than half a billion dollars in its last mile network. It has opened 12 logistics sites around the country – including in regional cities such as Newcastle, Gold Coast and Geelong – creating more than 1,000 operational jobs, as well as flexible earning opportunities delivering packages with Amazon Flex.