If there’s one thing America is short of right now, it’s truck drivers. And we’re not just talking a shortage of hundreds. Based on available information from the American Trucking Association, we’re 48,000 drivers short this year. Although some analysts are saying that the shortage will continue to rise but eventually stay fixed at 100,000, there are also those who are saying that if we are unable to hire at least 89,000 new drivers within the next decade, what’s 48,000 now can easily go up to hundreds of thousands.
To solve the truck driver crisis, there’s a clamor for higher pay; more comprehensive benefits; better driver retention programs; a modification in government regulations relative to the minimum age requirement for tractor-trailer driving which is currently at 21; and a change in trucking conditions, specifically those that will entice more women to enter the industry. Last but not least, some are pinning their hopes on autonomous self-driving trucks.
One industry that is greatly affected by the truck driver shortage is the shipping industry. Without a sufficient number of drivers, delivery of goods will not be as fast and efficient, and will therefore be prone to delay.
As one of the biggest shippers in the U.S., it is not surprising that Amazon.com, Inc. (NASDAQ:AMZN) is taking matters into its own hands. Instead of waiting for the truck driver shortage to materialize, they are coming up with their own solutions.
There’s drone delivery which is pretty self-explanatory — the use of drones to deliver packages. There’s Amazon Flex — the service that allows any driver who has a private vehicle to make package deliveries on Amazon’s behalf. There’s the rumored Amazon trucking app (supposedly being worked on right now) which is designed to connect shippers with truck drivers (like the principle behind Uber). And then there’s self-driving trucks.
To be clear, it’s not the self-driving trucks that will be delivering the packages directly to your doorsteps. Rather, the trucks will be used to transport your orders from Amazon’s warehouses to their respective shipping centers. From there, delivery will still be done through Amazon’s existing partners (United Parcel Service Inc (NYSE:UPS), FedEx Corporation (NYSE:FDX) or the US Postal Service), or through its Amazon Flex service, for now, that is.
With the way things are going, however, especially in light of successive Amazon acquisitions (branded trucks, cargo planes, an ocean shipping license, drones), it is not illogical to expect that Amazon will ultimately take on the sole responsibility of delivering. In other words, UPS and FedEx should already be preparing for the eventuality that Amazon will do away with their services altogether as the company fulfills its ambition of becoming a full-fledged or an all-inclusive logistics company — one with a global infrastructure that is fully capable of moving its goods from its warehouses directly to their customers, without any assistance from anyone else in between.
All things considered, it looks as if drones will give Amazon an advantage. But it’s self-driving trucks that will have a greater impact on Amazon’s future. Through autonomous self-driving trucks, Amazon will likely achieve its own autonomy too.
On a separate yet related news, Amazon shares, currently up more than 14 percent year-over-year, last fell more than 5 points to $760.59. Despite the run-up in the share price, security analysts rate the stock a ‘Buy’.
Of the 37 analysts analyzing the issue, 33 rate it a ‘Buy’, four recommend ‘Hold’. No analyst rates it a ‘Sell’. Amazon stock has a median Street price target of $937.50 with a high target of $1,250.00.
Leave a Reply