'This is just another piece of the puzzle': Amazon is now rolling out branded tractors in its latest move to become a full-fledged trucking company

Courtesy of Brad PhippsAmazon is amassing a fleet of branded truck tractors.
  • Amazon is rolling out a fleet of branded truck tractors. Since 2015, Amazon has used branded trailers.
  • Volvo and Kenworth are manufacturing the trucks.
  • Experts told Business Insider that it was a sign Amazon might start directly employing truck drivers – a move from contracting with independent truck drivers and small companies.
  • Visit Business Insider’s homepage for more stories.

Amazon is rolling out a fleet of branded truck tractors in its latest move to become a full-fledged logistics company, Business Insider has learned. Volvo and Kenworth are manufacturing the tractors.

It’s not known how many trucks are being made or when they will be released. But across the country, truckers said they have spotted these tractors at Volvo and Kenworth.

The tractors are what are known as “day cabs,” rather than “sleeper cabs,” indicating that the drivers in the trucks won’t sleep there. So, the trucks will be used for distances 400 miles or shorter, SJ Consulting Group’s principal consultant Satish Jindel said.

Amazon confirmed the news and referenced an April 15 video posted on Twitter by Dave Clark, Amazon’s senior vice president of operations. The video shows a Volvo and Kenworth tractor with an Amazon-branded trailer:

A Kenworth spokesperson declined to comment. Volvo confirmed to Business Insider that Amazon is a Volvo Trucks customer.

Amazon has signalled its interest to become a logistics giant.In the span of several years, the retail giant has amassed dozens of cargo jets, about 10,000 truck trailers, a network of ocean freighters, and thousands of last-mile delivery vans. Most recently, Amazon announced a massive order of 100,000 electric delivery vans in September.

“They have already got branded aeroplanes. They have got a last-mile delivery network that’s growing; they have got branded trailers – one of the only things left is tractors,” Cathy Morrow Roberson, the founder of the consulting firm Logistics Trends & Insights, told Business Insider. “This is just another piece of the puzzle.”

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Amazon has quietly ordered 2,000-plus vans to deliver your Prime packages – and UPS and the Postal Service should feel stressed

Many experts say Amazon is building up a network that could someday compete with UPS or FedEx. “It appears likely Amazon will move to a broader package delivery offering in the US over time, which remains a meaningful long term risk for UPS and FDX,” the UBS analyst Thomas Wadewitz wrote in an analyst note earlier this year.

Since 2015, Amazon has used branded trailers to move goods nationwide. Those trailers are attached to a tractor of another trucking company or an independent truck driver.

Read more:
Amazon took over the $US176 billion market for cloud computing. Now it’s using the same playbook in logistics.

Amazon skitchedAmazon, Rachel Premack/Business InsiderAmazon has had truck trailers since 2015. But tractors are new.

Amazon has been rapidly in-housing even more of its trucking needs this year, matching other massive jumps to insource logistics services in air and last-mile delivery.

The trucking insourcing has been a hit to several logistics companies that counted the e-commerce company as a leading customer. XPO Logistics, for instance, announced in February that its largest customer was moving away from outsourcing to XPO, and the customer’s in-housing would ultimately slash $US600 million in expected revenue. (Analysts universally agree that the customer was Amazon, though XPO has not publicly named the company.)

A $US402 million trucking company went under in February, a bankruptcy that analysts said was partially because of Amazon’s in-housing moves.

“They have learned from others, they have pulled their business from them, and they’re going to do it on their own now,” Roberson said. “That’s just how they go.”

Amazon may be hiring its own troop of truckers

The branded tractors may be a sign that Amazon is looking to directly employ truck drivers. Jindel of SJ Consulting said acquiring branded tractors was very uncommon unless the company was planning to hire truckers. Walmart, for instance, has some 8,600 company drivers driving goods in its branded tractor-trailers.

“The only time companies use branded tractors is if they’re used by their own employee drivers,” Jindel told Business Insider. “This is probably an indication that Amazon will have company drivers as opposed to independent drivers.”

Amazon last mile delivery shareRakuten Intelligence; Andy Kiersz/Business InsiderAmazon moves most of its own packages. That’s a warning sign for UPS, FedEx, and scores of trucking companies.

Some truck drivers don’t presently have a positive view on Amazon, which launched an in-house brokerage service this year.

According to a report from FreightWaves, Amazon’s rates in the spot market – which is when retailers and manufacturers buy trucking capacity as they need it, rather than through a contract – are on average 18.4% lower than rates posted on DAT, one of the largest broker boards in the country.

That may complicate its ability to hire its own truckers. Daniel Lacroix, who is a director at a regional trucking company, told Business Insider that he wasn’t interested in working with Amazon after seeing the rates offered.

“We didn’t make it past the initial bid process because the rates were just ridiculous,” Lacroix said. “I love Amazon. I get all of my stuff off of Amazon, but I don’t want to do business with them.”

Read more:
Truckers say Amazon’s new logistics empire is being underpinned by low, ‘ridiculous’ rates – and some are refusing to work with them

“It is another indication that Amazon is going to, in time, have a complete capability to handle all the transposition and distribution needs of its business and of its customers,” Jindel said. “They know having logistics is a core competency to their retail business.”

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