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Amazon Goes Rural
Expanding their reach, looking to cut delivery times by 50%
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Tech
Amazon Goes Rural
Expanding their reach, looking to cut delivery times by 50%
Amazon is attempting to further their dominance and take control of the delivery game. The company is striving to make a bigger push into rural areas, a move that could mean fewer deliveries are handled by the U.S. Postal Service.
Amazon has stated that, currently, 5 billion items arrive the same day or next day - which is up more than 30% from this time a year ago. They have expanded same day delivery to more than 120 U.S. metro areas, which is up from 110 U.S. metro areas just a month ago.
And now, are looking to expand to the rural areas, as well, with the opening of smaller, optimized delivery centers that are closer to those rural locations. Such as small cities in Texas, Minnesota, Louisiana and Arizona. Amazon will use contracted drivers, as well as partnering with small businesses for the deliveries.
Amazon plans to open 170 more warehouses, with 103 of them expected to be delivery stations for packages. These 103 would be smaller, local distribution centers that are strategically positioned for last-mile deliveries. An Amazon spokesperson explained that these rural delivery stations will help cut delivery times by 50%.
“We believe there are more opportunities ahead for us to continue delivering our wide selection of products even faster for our customers, regardless of location,” said Amazon spokesperson Sam Stephenson. “Expanding our rural delivery network will help cut delivery times for customers in smaller towns and more isolated parts of the country.”
Amazon has already cut the distance items travel between sites and customers by 10% so far in 2024 (compared to a year ago). They’ve also increased the average number of items per box, which reduces the total number of required deliveries for said items.
The Wall Street Journal claims that Amazon’s strategy is to reduce the reliance on the USPS, which has been raising rates and limiting services. The USPS has been dealing with criticisms of their delivery speeds, as they attempt a financial turnaround.
However, Stephenson said that that idea is inaccurate, and that the two “are valued partners.” But right now, more than ⅔ of Amazon’s packages are delivered through their own logistics network. As of last year, USPS handled 9%, while UPS handled 8%. Both numbers have gone down in recent years.
Amazon doesn’t have the capabilities to deliver to every U.S. customer just yet, but they have set a target of nearly 90%.
Amazon has already put a hurting on many companies, such as Best Buy, Macy’s and Sears. And now, the USPS (and UPS) seems to be the latest in their line of fire. The strong only seem to be getting stronger, in this case.
More Stuff
Economy
Will Rates Fall in September?
Interest rates have stood at a 23-year high for 12 months now. And as The Federal Reserve made an expected announcement yesterday, and Fed chair Jerome Powell held a press conference, no changes or cuts occurred. Not yet, at least. The news came after their two-day policy meeting.
The hope remains that the rate cut will come in September (CME FedWatch Tool puts the chances at 85%). As Powell has reiterated many times, he is waiting for inflation to get back to around 2% first. After a steady decline in inflation the last two years (after a 40-year high of 9.1% in mid-2022), there was a surprising increase earlier this year.
Barlcay’s is predicting inflation to fall to 3% by December, which, at year's end, would still remain 50% higher than Powell’s 2% benchmark - which might be troubling.
Or, it might signal that Powell will have to give in before his preferred time. He has emphasized previously the risks to the economy and labor market if they were to wait too long, or be too cautious, in reducing interest rates. Powell is attempting to wait out inflation, but that can be a dangerous game… especially in these modern times.
Along with inflation, the Fed must also see more evidence of the labor market and consumer spending softening. Unemployment rate just inched up to its highest number (4.1%) since November 2021 and consumer spending (2.3%) is lower than it was a year ago (3%).
The last time the Federal Reserve cut interest rates was in March of 2020, right at the start of the pandemic. The move, then, was aimed at combating a recession, which forecasters had considered to be likely.
Interest rates are the main tool the Fed uses to lower inflation. High rates make borrowing more expensive, which then slows spending and the economy.
Water Cooler Talk
Finance
Earnings Update!
Nvidia to the moon!
A handful of tech companies are reporting earnings this week, but none bigger than the biggest: Nvida, whose shares were up 12% by midafternoon trade Wednesday. Morgan Stanley analysts also named them as a top stock pick.
The big advantage for Nvida is their connection to AI. The first question of Microsoft's earnings call this week was on investments in generative AI (and whether they were paying off). Alphabet (Google’s parent company) faced similar AI-related questions last month, as well. Meta, Amazon and Apple will likely get similar questions, too.
AI is the new buzzword, and Nvidia seems to be at the top of that game.
Mentions of "AI infrastructure" and "generative AI" were aplenty in last cycle's tech earnings calls, and more than a few companies name-dropped Nvidia.
In other news:
World News
Venezuela: An Election Stolen
Protests turn deadly
Troubling stories out of Venezuela, following their latest presidential election. Nicolas Maduro, the incumbent, has claimed to have won the July 28th vote, despite many Latin American leaders disputing those claims. This has sparked deadly protests throughout the country.
The country's electoral authority, which is filled with Maduro allies, announced his questionable victory, claiming that Maduro received 51% of the votes. This would be Maduro’s third term, as he has been in power since 2013 (terms are six years).
Meanwhile, his opponent, Edmundo Gonzalez, claims that they have proof that he actually won the election, and not Maduro. Gonzalez has said that they have obtained more than 70% of tally sheets from the election, which show that Gonzalez had more than double the votes of Maduro (6.2 million to 2.7 million).
There is an unverified video on social media of people finding a warehouse with supplies, such as medicine and food, which had been hidden to increase the power of the regime. It’s already been a 25 year run of single-party ruling in Venezuela. The ruling party also wields tight control over the voting system.
The country has struggled under Maduro. Venezuela was once Latin America’s most advanced economy. However, they have since experienced widespread shortages of basic goods and hyperinflation of 130,000%. 7.7 million Venezuelans have fled their country since the 2018 reelection. Following that reelection, which dozens of countries condemned as illegitimate, U.S. oil sanctions sought to force Maduro from power, but to no avail.
Gonzalez, who is 74 years old, was chosen in only April to replace Maria Corina Machado as the opposition, after Machado was blocked by the Maduro-controlled supreme court from running for any office for 15 years. And yet, Gonzalez, reportedly, still received about ⅔ of the votes.
Even the U.S. is getting involved, in hopes of influencing an actual fair election process.
Top Hamas Leader Assassinated
Hamas’ top political leader, Ismail Haniyeh, was killed yesterday in an apparent assassination at his home in Iran. He and his bodyguard were both killed after attending the inauguration for the new Iranian president.
Hamas and Iran immediately blamed Israel and promised a strong response. The military wing pointed to this assassination as “incentive for everyone to back and support the resistance” in Gaza. They also called this move a “miscalculation” by Israel. They called it a “watershed and dangerous event that takes the war to new levels and will have enormous consequences.”
Iran’s president said that Israel will regret its “cowardly action.” Meanwhile, the U.S. is attempting to “take the temperature down.”
What Else to Know
Sports
Crazy for Yeji
South Korean sharp shooter is stealing the show
There’s a new athlete taking the world by storm at the Olympics… and it’s South Korea’s Kim Yeji. She’s a 31-year-old sharpshooter, who won the silver at the 10-meter air pistol event on Sunday. She also set a new world record for the women’s 25-meter air pistol.
She has won people over with her cool and calm demeanor, as she often fires the gun with her other hand in her pocket. One video of her (from May) has already gained more than 9 million views on X (formerly Twitter). She has even been compared to a movie character, or superhero, of sorts.
Meanwhile, checking on the medal count (as of 4 PM ET on Wednesday): The U.S. still has the most overall with 30, five more than any other country (France). However, of those 30, only five have been gold - which is just the seventh most. China and Japan each lead the way in gold medals with eight. The U.S. is first in both silver (13) and bronze (12). 17 of the 30 medals have come in swimming.
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