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Amazon plans startup delivery services for its own packages

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An example of the Amazon delivery truck and employee uniform, in Seattle. For a minimum investment of US$10,000, people in the US will be able to open and manage their own delivery service handling Amazon packages.

Seattle

AMAZON has more than 100 warehouses. It has a fleet of trucks, and even its own airplanes. Now, in another effort to help get its millions of packages to shoppers faster, it wants to build an army of delivery people, too. The company on Thursday announced a new programme aimed at helping people start their own businesses delivering packages for Amazon.

For a minimum investment of US$10,000, people in the United States will be able to open and manage their own delivery service handling Amazon packages. Although the couriers will not be employees of the company, they'll get access to Amazon-branded vehicles, uniforms and more. By the company's calculations, an owner could earn as much as US$300,000 a year in profit by operating a fleet of up to 40 vehicles.

The programme is a potential solution to a growing problem Amazon faces as it handles an ever-increasing number of packages for customers across the country: how to quickly get packages from its various package-sorting centres to people's doorsteps.

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But the startup service is certain to raise questions about whether it could challenge - or even replace - some of the work done by Amazon's partners, including United Parcel Service and the US Postal Service.

Amazon's business ties with the Postal Service have come under considerable scrutiny in recent months. President Donald Trump has argued on Twitter that Amazon's agreement with the Postal Service, which sets the amount Amazon pays the agency, was costing taxpayers billions of dollars.

"I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy," Mr Trump wrote in a tweet in April.

While the details behind the agreement are not public, available evidence suggests the opposite: that Amazon's business has been a boon to the post office. Some current and former White House officials have said that Mr Trump sometimes blends Amazon with The Washington Post, which has covered his administration aggressively. The Post is owned by Amazon's founder, Jeff Bezos.

In mid-April, Mr Trump abruptly issued an executive order demanding an evaluation of the Postal Service's finances. The order did not mention Amazon, but it was clear that he would like for the panel to substantiate his claims that the financial arrangement between the Postal Service and Amazon, its biggest shipper of packages, is a money loser.

Executives at Amazon dismissed any link between the new delivery programme and Mr Trump's Twitter attacks about its agreement with the post office. "This doesn't play into that debate at all," Dave Clark, Amazon's senior vice-president of worldwide operations, said in an interview on Wednesday afternoon at the Admiral's House, a historic landmark property overlooking Elliott Bay in Seattle. Mr Clark said that his job was to think five to 15 years down the road about Amazon's needs and that the new delivery programme was designed to meet growth and capacity demands. He added that Amazon would continue to use all its partners, including the Postal Service, to get packages to its customers.

Amazon has been testing a number of programmes that could replace or reduce its reliance on its delivery partners. This year, for instance, it plans to test a new service in which company couriers would pick up products from businesses that sell goods through Amazon and deliver that merchandise to its warehouses. Currently, that work is done by UPS, FedEx and other companies.

The new programme is also separate from Amazon Flex, which pays individuals US$18 to US$25 an hour to deliver packages from their own vehicle. Under the programme, individuals will not be employees or even independent contractors of Amazon, but rather, be owners of their businesses, contracted with Amazon to deliver packages. Amazon said its vehicles could be used to deliver packages only from the company, not its competitors.

The programme will start in more than two dozen states, many of them along the coasts. But company executives encouraged interested individuals to sign up even if their city or region wasn't currently listed, because Amazon expects the programme to grow.

Amazon hoped in the next 12 to 18 months to have hundreds of people sign up, calling them delivery service partners. If the service is successful, it would most likely be extended to other countries, Mr Clark said.

And in a bid to attract the nation's military veterans to the programme, Amazon is offering US$10,000 reimbursements for qualified candidates to start their own businesses. NYT