Amazon has built its empire with the help of the United Parcel Service (UPS). Now, it wants to abandon UPS, as well as other shipping companies, and fly solo. It calls its new project Amazon Relay, and it wants to enlist trucking companies to do deliveries for them. Interested?
Relay is a load board. Unlike most load boards that are simply the middleman between the person needing goods shipped and a carrier, Amazon is also the company that needs the goods shipped from point A to point B.
Amazon relay has two modes: Standard and Book a Truck. Standard is what you would generally expect: you are given a list of all the loads needing to be shipped, and you use filters to find the load that works best for your truck. Book a Truck is designed to minimize idle time between loads; post details regarding your particular truck looking for a load (trailer type, location, etc.) when your truck is not working, and Amazon will give you a list of all the relevant loads so you or your driver can get back on the road as soon as possible.
Essentially, it works as a combination of spot market and contract market. You can plan your loads out in advance, or use Book a Truck to get something quickly. Amazon hopes that combining the flexibility of the spot market with the consistency of the contract market will help fleet drivers happy and reduce company turnover.
Joining the Club
Amazon, like any trucking company worth its weight in diesel, is only interested in hiring the best and safest drivers. To sign up, your established company needs:
- An active DOT number with interstate authority.
- A valid MC number.
- A “Carrier” entity type that is Authorized for Property.
- A “Carrier” entity type that is Authorized for Hire.
- A Federal Motor Carrier Safety Administration (FMCSA) Safety Rating that is not Conditional or Unsatisfactory.
- Different forms of insurance coverage:
- Commercial General Liability not less than $1,000,000 per occurrence and $2,000,000 in total.
- Auto Liability equal to or greater than $1,000,000 per occurrence, including a trailer replacement coverage of $50,000.
- Cargo coverage of at least $100,000.
- Workers’ compensation insurance in all jurisdictions where your company operates.
- Employer liability greater than or equal to $100,000 per occurrence.
Amazon Relay App
Beyond having all the driving paperwork set and done, Amazon also requires those who wish to use Amazon Relay to “execute loads using Amazon Relay technology.” This means downloading the app on phones to use, either on Android or iPhone.
The app has a handful of features that a trucker will find useful. Truck-friendly navigation, load notifications, and load history are very standard features on most apps, but Amazon has gone two steps further beyond with what can be done on the app.
First, the company driver can use the app to report a disruption or delay to your dispatcher, in the off chance the truck driver runs into a scenario that will make the deadline unable to be fulfilled.
Second, and perhaps the most interesting feature of the app, is that Amazon automatically generates invoices, proof of delivery, and bills of lading for all deliveries made through the application. While small business carriers and brokers argue with the FMCSA over broker transparency regulations, Amazon cuts through the red tape and allows you to access the paperwork with a few taps of your phone.
Safety and Performance
Amazon tracks its carriers’ safety and performance metrics. For performance, they track loads that were delivered on time and in good condition, they would not want any computers smashed in delivery, would they?
When you log into the Relay website, you can view on the dashboard your performance through a scorecard. Relay says on its FAQ, “You can review your performance for all of your loads, in order to continuously improve and have the opportunity to grow your business with Amazon.”
Furthermore, the company puts a high priority on safety. Not just behind the wheel as stated above in “Joining the Club”, but also when not behind the wheel such while visiting a facility or a truckstop.
Amazon goes the extra mile in safety by offering its own trailers for shipment, that they describe as coming “with automated inflation alert technology, ABS II [anti-lock braking system 2], a kingpin hook safety securing plate, and rear corner safety grab handles to assist safe access to the trailer.
Imagine your business onboarded with Amazon and is fulfilling loads. Your five drivers each fulfill a load on a different day of the week. What is the turnaround time to getting paid? Payments are sent out the following Friday from fulfilling a delivery. Here are the numbers, not counting the day the load was delivered itself:
- Sunday: 12 days.
- Monday: 11 days.
- Tuesday: 10 days.
- Wednesday: 9 days.
- Thursday: 8 days.
- Friday: 7 days.
- Saturday: 6 days.
In an industry where payment turnaround times can be beyond a month, getting it within a two-week period is a plus. It also reduces the chances of needing to use a factoring company, which would otherwise take a percentage of the value of the contract in exchange for the service.
Additionally, if you have any issues regarding payment, you can submit a dispute with Amazon through the online load board. Be quick, though, the terms of service says you only have 30 days from receiving your weekly invoice to dispute any claims!
You can apply on Amazon Relay’s website to join the load board. After submitting an application, it may take 2-4 business days to reject or approve your application, or longer if they are having difficulty validating your insurance information.
If you have any further questions that may have not been fulfilled by our guide, you can read Amazon Relay’s FAQ for more information.
What will be interesting in the future to look out for is how the Department of Labor and various states will determine the employee classification of working under this system. Each trucking company is its own established business, which would lean the work in favor of independent contracting, but the delivery of goods from warehouse to a warehouse closer to its final destination is also an integral part of Amazon’s business operations, and as such it may be determined to be an employee. Only time will tell of this in the future, but with Amazon’s rich history of being able to manipulate governments before, as with the story of Amazon’s HQ2 tax incentives, it will be interesting to see any court disputes set into motion and what becomes of them.