According to the website Business Insider, several contractors that help to deliver packages for Amazon have announced that they expect to lay off approximately 2,000 drivers. The move affects drivers employed by Letter Ride, Inpax, Sheard-Lomax Transportation, and Urban Mobility Now, all of which make last-minute deliveries for the online retail giant. The most typical reasons for the layoffs include the filing of Worker Adjustments and Retraining Notifications and the expiration of contracts with Amazon.
What is a delivery service partner?
A delivery service partner (DSP) is a third-party delivery company that typically works only with Amazon. The DSPs then control driver schedules, wages, benefits, and maintenance of commercial vehicles. Those that have chosen to discontinue delivering packages for Amazon have worked with drivers to find positions with other companies that still deliver for Amazon.
Contracting out to a DSP benefits Amazon because it costs much less to deliver packages this way than to offer delivery drivers direct employment. Although relationships with the carriers above ultimately didn’t work out, Amazon is still looking to contract with several new DSPs. It prefers to work with delivery companies that have a fleet of at least 40 commercial vehicles available for deliveries, especially over the holiday season. Transportation industry analysts predict that Amazon will continue its relationships with smaller and newer DSPs while it discontinues doing business with the larger carriers.
The challenges for Amazon DSPs
One risk that DSPs take when agreeing to a contract with Amazon is that the online retailer often makes up a large percentage of their business. This leaves delivery businesses vulnerable to changes and demands made by Amazon. If Amazon reduces business, for example, the DSP can find itself scrambling to bring in lost revenue. Other company owners have found that Amazon doesn’t deliver as much revenue as expected and cut ties on their own.
Hiring inexperienced drivers part of the problem
Some companies learned the importance of hiring good drivers the hard way when it became necessary to file retraining notifications and discontinue delivering for Amazon. As a motor carrier hiring new drivers, the best thing you can do is take your time to thoroughly investigate an applicant’s background before making an offer. The Federal Motor Carrier Safety Administration (FMCSA) offers several resources for employers to check the background of driver applicants for past violations and a history of quickly moving from one motor carrier to the next.
Besides a clean background, qualities of a good driver applicant include:
- Current commercial driver’s license (CDL)
- Ability to troubleshoot and perform basic repairs and maintenance on commercial vehicles
- Ability to follow traffic rules and learn complex on-the-job information quickly
- Ability to use route planning tools well
- Strong time management, customer service, and professional communication skills
While these are just some of the many qualifications of an excellent commercial driver, the list gives you a place to start the next time you need to hire new help.
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