Amazon’s moves hurt local delivery firms
E-commerce giant cuts ties, looks to fill jobs
After cutting ties with several local delivery companies, Amazon is looking to fill more than 1,500 fulland part-time jobs at two new Pittsburgh facilities.
Amazon’s announcement on Tuesday comes days after delivery companies that the Seattle-based tech giant had previously partnered with notified Pennsylvania officials of layoffs totaling more than 400 workers.
“The announced layoff is the result of our organization and a major client abruptly ending our contract, causing this unforeseen business circumstance,” Courier Distribution Systems LLC, a Georgia-based freight and logistics company with several locations in Pennsylvania, wrote to state officials on Aug. 11.
Courier Distribution Systems announced nearly 180 layoffs on the same day, including 64 from its Sewickley location, 54 from King of Prussia and 60 from Philadelphia.
Deliverol Global Inc., another delivery company with the same headquarters as Courier Distribution Services, sent a letter Aug. 11 announcing it would lay off 41 employees from its facility in Bucks County.
Earlier this month, Prime EFS, which is based in New Jersey and has the same office location in Bucks County as Deliverol, announced 114 job losses. Marylandbased TL Transportation LLC sent a letter detailing 80 layoffs at its Philadelphia location due to the “termination of TLT’s major customer contract.”
Amazon began partnering with small delivery companies in 2018 when it launched its Delivery Service Partner program, which allowed entrepreneurs to tap into Amazon’s network and Amazon to
improve its “last mile” delivery services. The “last mile” usually refers to the final step of bringing packages to a customer’s doorstep.
Since 2018, Amazon has partnered with 1,300 delivery companies in six countries and created 85,000 jobs, according to an August blog post from the e-commerce giant. The program has helped deliver 1.8 billion packages worldwide and generate $4.5 billion in revenue for small businesses.
But, in recent months, Amazon has cut ties with some companies, resulting in more than 1,200 job losses for delivery drivers around the country, according to a CNBC report. Amazon made similar cuts to contracts in February that led to about 2,000 layoffs.
An Amazon spokesperson said the company works with a variety of carrier partners and regularly evaluates those partnerships.
“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 said.
Amazon has seen record growth amid the novel coronavirus pandemic, which temporarily shuttered most in-person operations and sent people shopping for everything from groceries to office supplies from their homes. In the second quarter of 2020, the company reported that net sales increased 40% to $88.9 billion while net income grew to $5.2 billion.
Since March, Amazon reports it has created 175,000 new jobs and is bringing 125,000 of those employees into regular, full-time positions.
In Pennsylvania, Amazon now wants to add to its 16,000-member team. The company is looking to hire 1,000 full-time workers at a new fulfillment center in Findlay and hundreds of full- and part-time workers at a new delivery station in Coraopolis.
The new delivery station will “power Amazon’s lastmile delivery capabilities” in Allegheny County, according to a press release.
At the Findlay fulfillment center, employees will work alongside technology to pick, pack and ship large items, including bulk cleaning supplies, sports equipment, pet food and electronics.
Amazon broke ground on the fulfillment center in July 2019 and planned to invest $30 million in the location. At the time, the company received a funding proposal from the Pennsylvania Department of Community and Economic Development for $1.6 million in Job Creation Tax Credits to be distributed when the Findlay fulfillment center jobs are created.
The center will be open ahead of the 2020 holiday season, an Amazon spokesperson said.
Through fulfillment centers, tech hubs and employee compensation, Amazon says it has invested $12.4 billion in Pennsylvania from 2010 to 2019, according to the release announcing the job openings. Its investments have also helped create 17,200 indirect jobs through things like construction and logistics services, the company says.
“For nearly a decade, the Keystone State has been key to Amazon’s ability to serve our incredible customers,” Robert Plemmons, site leader, Amazon, said in a prepared statement. “And we are proud to create more than 1,500 new jobs.”