IQDI informed employees on July 1 that it had lost its contract with Amazon. 31, 2019, was attributable to Prime EFS' DSP contract with Amazon.įor others, Amazon's decision to end a contract can seem abrupt, including at IntelliQuick Delivery Inc., an Arizona-based delivery contractor. Transportation and Logistics Systems, the parent company of Prime EFS, said 74% of its revenue for the year ended Dec. In some cases, the loss of a contract with Amazon can deliver a blow to a DSP's business. Amazon promises start-up costs as low as $10,000 to launch a delivery fleet and the potential to earn $300,000 a year once a fleet spans 20 to 40 vans.īut the ease with which Amazon can cut contracts with DSPs shows that the program isn't devoid of risks for the entrepreneurs who choose to launch their own delivery service. The DSP program is an alluring prospect for aspiring business owners. So even with the recent cuts, Amazon has added plenty of new partners to take over. While Amazon continues to cull poor-performing delivery partners, the program has grown quickly since it launched two years ago. There are now more than 1,300 DSPs across five countries that have added 85,000 jobs and delivered more than 1.8 billion packages worldwide, Amazon said in a blog post earlier this month.
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"We have ended relationships with some partners and Amazon is working closely with all impacted drivers to ensure they find opportunities to deliver Amazon packages with other local Delivery Service Partners with little to no disruption to pay," the spokesperson added.Ĭourier Distribution Systems, Systemize Logistics, TL Transportation, Prime EFS, JST Transportation, Deliverol Global and Sheffield Express didn't respond to requests for comment. In another recent round of layoffs, beginning in February, the company ended contracts with Transportation Brokerage Specialists, Bear Down Logistics, Express Parcel Service and Delivery Force, among several other firms, resulting in at least 2,000 layoffs. Sheffield Express laid off 95 employees in Connecticut and said it would close its facility there.Īn Amazon spokesperson told CNBC in a statement that the company regularly evaluates its carrier partnerships. JST Transportation laid off 51 employees in Massachusetts and Deliverol Global cut 41 jobs in Pennsylvania. Prime EFS, based in New Jersey, was forced to lay off 388 employees in the state and in Pennsylvania. Massachusetts-based Systemize Logistics is closing locations in Connecticut and New York, eliminating 121 jobs.Įlsewhere, TL Transportation, based in Maryland, is cutting 80 jobs in Pennsylvania, while shutting down a New York facility, resulting in 76 layoffs. Courier Distribution Systems, a delivery partner based in Georgia, is laying off 273 drivers in Pennsylvania and Wisconsin. Many of the firms impacted by Amazon's culling of DSPs have announced layoffs across several states and shuttered locations, though the Amazon delivery stations they operate out of remain open.
DSPs are contracted delivery providers, usually distinguishable by Amazon-branded cargo vans, that are responsible for picking up packages from Amazon delivery stations and dropping them off at doorsteps. Amazon's DSP program, launched in 2018, has allowed the company to quickly scale up its last-mile delivery capabilities and compete with shipping partners such as UPS and FedEx.
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