A report issued last night by CNBC stated that e-commerce giant Amazon recently rolled out an app, entitled Relay, that is geared towards truck drivers to better enable them to pick up and drop off packages at Amazon warehouses.
As for how Relay, which can be used on Apple and Android devices, works, the report said that truck drivers enter information into the app that allows them to check in with a QR code and get through a security gate and eschew typical manual processes for badging in, with some Amazon facilities having Relay lanes.
The report explained that even though Relay’s focus may be viewed as narrow, it also serves as the first connection point between Amazon and potentially millions of truck drivers.
What’s more, it is in line with Amazon’s many logistics coals in the fire, as it has been very active in expanding its own logistics network in the form of things like opening 20 regional sort centers and launching its own air network contracting with ATSG and Atlas Airlines. Other logistics-related efforts of note by Amazon include things like testing drone delivery of parcels, and building an Uber-like app for freight, among others.
“The app addresses a large area of inefficiency in the supply chain, one that we expect will be of increasing focus among carriers/brokers/shippers as the December 2017 ELD mandate is implemented, but at the moment the app appears to stop short of offering full-fledged truck brokerage capabilities,” Robert W. Baird analyst Ben Hartford commented in a research note.
The analyst also observed that the app’s focus on pick up and delivery is notable for two reasons. One being that this process is very inefficient in the supply chain and will be of increasing focus as the ELD mandate is implemented in December 2017 as carriers/brokers/shippers look for opportunities to maximize productivity within the window of a given driver’s hours-of-service availability and the second being that the app seemingly stops short of introducing broader “truck brokerage” capabilities, though such additional capabilities could be added to the application over time.
The second part of Hartford’s analysis in that Relay does not include truck brokerage capabilities is telling in that in late 2016 Business Insider reported Amazon was at work on an app expected to be released in the summer of 2017, which was billed in the report as “Uber for trucking, that matches truck drivers with shippers looking to move freight, while also removing “the need for a third-party broker, which typically charges a commission of about 15% for doing the middleman work.”
The article observed that this presents a major growth opportunity for Amazon with around 84 percent of freight spending allocated for trucking and worth $800 billion based on data from Convoy, a trucking startup. And given the sheer scale of Amazon’s customer base and global reach and density, the article said that Amazon has an advantage in that it does not require the traditional supply and demand needed for Uber for trucking, as it, instead, already has a large shipping network and growing package volume, making it less challenging for drivers to find a load match via the app.
Around the time of this report, industry stakeholders told LM that Amazon getting into the brokerage side would not be viewed as surprising, because it makes sense, considering how Amazon has its own density and can leverage its own network, while also providing control over costs and visibility to costs and transactions.
About the Author
Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman
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