Amazon Turns to Small Businesses to Close Last-Mile Delivery Gap

Amazon is reportedly planning to recruit small businesses to boost its last-mile delivery efforts.

The project — happening in 23 states — will involve a range of small businesses, including clothing stores, florists and bodegas, Axios reported Monday (June 26).

Beryl Tomay, vice president of Amazon Last Mile Delivery and Technology, told the news outlet that the program will help “create opportunities for delivery partners interested in growing a business … and supplementing their income.”

The report notes that the businesses don’t need to have delivery experience to take part in the program, which is being called Amazon Hub Delivery and targets cities including Boston, Seattle, Los Angeles and New York.

PYMNTS has contacted Amazon for comment but has not yet received a reply.

According to Axios, the program will work like this: Drivers from Amazon’s delivery service partner network will drop packages at local businesses, which must have a secure place to keep these items.

From there, the businesses will handle local deliveries. The program requires the businesses to deliver an average of 30 packages a day for seven days a week, outside of major holidays. The report says Amazon hopes to have 2,500 local drivers recruited by year’s end.

The program is rolling out at the midway point of a year in which both Amazon and rival Walmart have stressed the need to bulk up their last-mile delivery networks.

Walmart announced in January that it was expanding the Private Fleet Development Program it debuted in 2022 to beef up deliveries for its growing eCommerce business.

The program lets the retailer’s workers — in stores, distribution centers, fulfillment centers, and transportation offices within a 50-mile radius of a participating transportation office — take part in Walmart’s Associate-to-Driver program.

“After they complete the 12-week training course and earn their CDLs, they have a coveted Walmart driving job ready to step into,” the company said in a press release.

As PYMNTS has written, efficient last-mile delivery — bridging the gap between distribution centers and warehouses to the shopper’s home — is critical for retailers, as it helps cement consumer loyalty and their intent to keep buying.

And the last-mile sector has been seeing increased competition from smaller players attempting to compete with established companies such as FedEx and UPS.

For example, Openforce and Ryder teamed up earlier this month to offer commercial vehicle rentals to independent contractors, an offering designed to help contractors who are looking to transition to using sprinter vans and box trucks for last-mile delivery.