E-commerce giant Amazon is ending ties with several delivery contractors in the United States. The decision has come as a huge setback for many small delivery contractors. Hundreds of people now face job losses in the country. It is believed that Amazon is serving ties due to safety concerns. Several contractors were found short of meeting the safety guidelines set up by the company. Many of them even failed to meet performance requirements. The latest move has forced the delivery contractors to lay off hundreds of employees. Several firms have already announced to cut down jobs. Notably, delivery partner Bear Down Logistics has cut down nearly 400 jobs. Seattle-based Delivery Force has also decided to lay off 272 jobs.
Amazon in 2008 launched an initiative called Delivery Service Partners. The motto was to grow a strong delivery network. It also helped entrepreneurs to start delivery businesses. The company signed deals with several small logistics companies. Amazon provided support and training to these firms. However, the contractors were operating independently. They were providing all logistics for the delivery of products. According to an estimate, Amazon now delivers nearly half of the packages itself. The company also chose not to renew its air shipping contract with the global courier company FedEx. The contract ended in August last year. Amazon said that it is also growing its fleet of planes, trucks, and vehicles to match with its growing businesses.
Amazon has been working to grow its delivery network for years. The company claims that its Prime membership program has nearly 150 million subscribers. Its shipping costs have ballooned in recent times. The company spent USD 37.9 billion on shipping last year. This is an increase of 37 percent of the total amount it spent in 2018. The latest development is significant as it comes in the backdrop of flak it was facing after reports claimed a delivery network was rife with violations of the country’s labor laws. The violations resulted in accidents on several occasions, thus inviting bad light.