Amazon, Fedex, & Shopify Fulfilment: Advantages of Multi-Wave Dispatch
In Practise Analysis
inpractise.com/articles/amazon-fedex-and-shopify-advantages-of-multi-wave-dispatch
One specific quote by Andy Jassy stood out on AMZN’s Q4 22 call:
“it's important to remember that over the last few years, we took a fulfillment center footprint that we've built over 25 years and doubled it in just a couple of years. And then we, at the same time, built out a transportation network for the last mile roughly the size of UPS in a couple of years.” - Andy Jassy, Q4 22 Earnings
Since 2013, when Amazon started heavily building its network, its retail fixed asset base has grown 13x. Since 2019, it has tripled from a $40bn base.
Not only has AMZN built the last-mile capabilities of UPS and Fedex in 3 years, it has structural advantages embedded in its network design. A crucial part of this advantage stems from ‘multi-wave dispatch’ capabilities from its delivery stations.
We interviewed a Former Fedex executive, who spent over 35 years at the company, to walk through how a unit flows through a legacy carrier’s system and how UPS and Fedex can compete with Amazon.
A delivery station is at the end of the fulfillment network. At Fedex and UPS, delivery drivers visit the station at 7:30am to load their van with parcels for the day. The station effectively sits idle thereafter. This is single wave dispatch.
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