For most of Amazon's existence they have been getting the best deal that they can with the available shippers, primarily UPS, FedEx, and USPS in the US. They negotiated lower rates than the shippers offer to consumers and businesses in exchange for guaranteed delivery volumes. Basically Amazon promised to ship X million packages per week with shipper Y in exchange for "below market" rates.

The issues that Amazon has seen, particularly during holiday peaks is that shippers do not always want to continue to lower their rates and that shippers do not always scale up their operations to meet Amazon's needs during the holidays. For example: https://www.latimes.com/business/la-fi-christmas-shipping-de... and https://www.washingtonpost.com/business/economy/amazon-ups-o...

In response to shippers not doing what they want and to provide leverage, Amazon started to do their own shipping. This originally started as same-day delivery experiments in large cities as part of Amazon Fresh (grocery delivery service). It grew into non-grocery deliveries as a competitive advantage for Prime same-day deliveries and expanded from there.

I expect that "Transportation By Amazon" (TBA) where Amazon does package delivery as a competitor to UPS and FedEx will probably start in the next year or two, barring any anti-trust or legal problems.

Most of their fleet is private contractors who supply their own vehicles. Minimal capital investment for Amazon

From the buzzfeedNews article, apparently they are proposing the lease of vehicles to their contractors

https://www.buzzfeednews.com/article/carolineodonovan/amazon...

I live in a South Florida county that has about 2 million people. I've never seen an Amazon truck before? The only shipped-by-Amazon deliveries I've received were from people in their own cars.

I do as well and I see them all the time in my area.

Maybe they see value also in being able to fully control the customer experience.

Your trusted Amazon delivery guy could fill your fridge while you supervise him through Amazon branded devices.

There is no trusted Amazon delivery guy. It's independent contractors mostly.

False, there are lots of last-mile Amazon delivery guys -- I live by a distribution center that has literally hundreds of Amazon-branded last-mile vans that deliver straight to my house.

The program you're thinking of is likely "Amazon Flex" which is just part of their last-mile delivery system and uses independent contractors.

Those aren't necessarily employees of Amazon, you can sign up to be a shipper and buy the vans. https://logistics.amazon.com/marketing/opportunity

Well the main reasons for not going horizontal are scale and volatility - which ammount to fixed costs essentially. If they can make a profit off of it then that implies cutting out the middlemen can potentially reduce expenses.

That said that they are /still/ smaller than Wallmart yet have scale sufficient to be competitive to mass shippers is amazing even considering the internet related physical letter shrinkage.

Not having to deal with liability and insurance probably helps the bottom line a lot.