Amazon orders 20,000 vans for new delivery program

When Amazon announced the delivery van programback in June, it anticipated ordering 4,500 vans. However, more than 10,000 applicants have signed up for the new delivery program  which have lead to Amazon Quadrupling its order of the new Sprinter model vans to 20,000!

Mercedes Benz Already starts Production

Mercedes, which just opened a new plant in North Charleston, South Carolina, started producing Amazon-branded vans for the online retailer’s Delivery Service Partner program, which enables small businesses to lease vans for deliveries through third-party fleet management companies.

Amazon's Motive is to assist small businesses

Amazon is assisting small businesses across the U.S. by providing discounted vehicles, fuel, insurance, uniforms and access to delivery technology, the Seattle-based company said in June. The bulk purchase of Sprinter vans makes Amazon the largest buyer of the model, Mercedes said in a statement Wednesday.

Should Amazon new delivery initiative be of concern to companies such as UPS and FedEx?

Well, in its annual report, UPS claimed that no single customer accounts for more than 10 percent of its consolidated revenue. However, stated in its "risk factors" section of its annual report, it acknowledges that "changes in our relationships with our significant customers, including the loss or reduction in business from one or more of them, could have an adverse impact on us."

While UPS haven't named Amazon specifically, it did say some of its large customers might account for a relatively significant portion of revenue growth and — in talking about risk to its own business — even speculates that these customers could take their volume elsewhere, demand lower prices or develop their own shipping and distribution capabilities.