Amazon's disruption of the traditional logistics industry through drones and distribution

TRANSPORTATION & LOGISTICS 3 Transportation & Logistics Two major trends in transportation and logistics are different in many respects. However, one of the main disruptors involved in both happens to be the same company. The trends are the emergence of drones and an upending of the long-standing triad that handles most logistics, which would be the United States Postal Service, UPS and FedEx. Of course, the firm in question is Amazon (Muoio, 2016). It is fairly widely known that Amazon wants to start using drones to deliver their packages. It is also widely known that Amazon makes heavy use of the United States Postal Service (USPS) despite the organization running on fumes due to the emergence of increased online communication and work and the market shares carved out by the aforementioned UPS and FedEx (Rich, 2018). The other trend that also relates to Amazon is much more current, although it is certainly related to the other one. Indeed, it would seem that Amazon is wanting to mitigate, if not eliminate, the billions of dollars that they spend on shipping items to customers. In 2017 alone, the relevant aggregate spending was north of $21 billion USD (Garcia, 2018). In addition to the clear advantage that Amazon would have in terms of having its own distribution network, it is also clear that they would present a rather threat to the existing three shippers. Further, it is entirely possible that Amazon could end up purchasing one of those three outright rather than trying to build its own delivery service organically. To state the obvious, the quickness and expediency that Amazon markets and pushes is benefiting them quite well. However, the sheer volume that they have reached has necessitated becoming more self-sufficient when it comes to the movement of items sold. In addition, Amazon is a heavy facilitator of transactions that often do not involve them directly. These logistical and shipping shifts would obviously impact many of those transactions as well (Johnsa, 2016). Logistics Policy The policy and legal paradigms are huge when it comes to what tends to affect and shape the logistics industry. There are a few examples that are easy to point to. For example, the United States Postal Service (USPS) has been around for a long time and it is very much a blend of public and private priorities and funding. Another example would be labor/union law and how it affects multiple companies within the logistical sphere. The laws, policies, agencies and standards usually stay very much the same over time. However, there can be shifts that come quite quickly and swiftly. An example would be the “right to work” argument that is prevalent in a lot of states. Beyond that, there is a case pending with the Supreme Court of the United States that could lead to an end of mandated union dues in public unions (Leef, 2018) There are many industries and locations around the United States that are part of the logistical industry and/or that rely heavily on the same. For example, it is quite common for new car factories to be built in the South. This is done mostly to avoid unionization efforts and the related laws (Scheiber, 2017). Further, the legal and ethical paradigms (not to mention the weather) are all quite favorable to logistics and companies that rely on the same in any major way. Even with that, there are certain parts of the logistical spectrum that affect all companies on one level or another. For example, any retailer that has an online shopping presence is going to have the proper partnerships, ethics, resources and options in place so as to ensure that shipping is possible to all corners of the world that crave the goods being sold. As online shopping becomes more and more of a norm, companies will shift their logistical efforts a great deal, up to and including creating their own shipping infrastructures and shifting away from ground and towards online operations. Just a few example firms would be Wal-Mart and Amazon. They are shifting in opposite directions, but for the same reasons (Stone & Boyle, 2017). References Garcia, T. (2018). This is the $21 billion reason Amazon wants to build its own UPS. MarketWatch. Retrieved 13 February 2018, from https://www.marketwatch.com/story/amazon-has-a-multibillion-dollar-reason-to-build- its-own-shipping-business-2018-02-09 Johnsa, E. (2018). Amazon Takes On UPS, FedEx With Prime and Third-Party Seller Growth. Real Money. Retrieved 13 February 2018, from https://realmoney.thestreet.com/articles /09/28/2016/amazon-takes-ups-fedex-prime-and-third-party-seller-growth Leef, G. (2018). Public Unions Are About To Lose Forced Dues In Supreme Court--What Will They Do? Forbes.com. Retrieved 13 February 2018, from https://www.forbes.com /sites/georgeleef/2017/11/01/public-unions-are-about-to-lose-forced-dues-in-supreme- court-what-will-they-do/1 Muoio, D. (2016). Amazon is growing its shipping network an absurd amount — and that could be bad news for FedEx. Business Insider. Retrieved 13 February 2018, from http://www.businessinsider.com/amazon-growing-shipping-network-2016-8 Rich, G. (2018). FedEx, UPS Shares Fall As Amazon Set To Launch Package Delivery Service For Business | Stock News & Stock Market Analysis - IBD. Investor\\\'s Business Daily. Retrieved 13 February 2018, from https://www.investors.com/news/fedex-ups-shares- fall-as-amazon-reportedly-will-launch-mail-delivery-service/ Scheiber, N. (2017). Nissan Workers in Mississippi Reject Union Bid by UAW. nytimes.com. Retrieved 13 February 2018, from https://www.nytimes.com/2017/08/05/business/nissan- united-auto-workers-union.html