Executive Briefings

Amazon's Plan to Avoid Delivery Delays This Holiday Shopping Season

Amazon cleared $25.6bn in the fourth quarter of 2013. A lot of Christmas wishes were no doubt fulfilled, but that holiday season is likely going to be remembered more for the packages that didn’t ship on time.

A surge of demand combined with some inclement weather to overwhelm the operations of Amazon’s largest shipping partner, UPS, and some customers didn’t receive their gifts by the holiday. It was the cardinal sin of online retailing, and the two companies had to offer apologies and refund shipping fees for disappointed customers.

Now the country’s largest online retailer seems determined not to let the same thing happen again.

Amazon has built 38 new fulfillment centers in North America over the last year and a half and an additional 15 “sortation centers,” a new category of smaller warehouse where packages from the fulfillment centers are sorted by ZIP codes. The sortation centers allow Amazon to ship packages directly to customers, rather than to the busy hubs of carrier partners like UPS, FedEx and the United States Postal Service, Amazon’s partner on Sunday delivery.

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A surge of demand combined with some inclement weather to overwhelm the operations of Amazon’s largest shipping partner, UPS, and some customers didn’t receive their gifts by the holiday. It was the cardinal sin of online retailing, and the two companies had to offer apologies and refund shipping fees for disappointed customers.

Now the country’s largest online retailer seems determined not to let the same thing happen again.

Amazon has built 38 new fulfillment centers in North America over the last year and a half and an additional 15 “sortation centers,” a new category of smaller warehouse where packages from the fulfillment centers are sorted by ZIP codes. The sortation centers allow Amazon to ship packages directly to customers, rather than to the busy hubs of carrier partners like UPS, FedEx and the United States Postal Service, Amazon’s partner on Sunday delivery.

Read Full Article