Just as Amazon once challenged traditional ups and FedEx in the last mile distribution area, Amazon is now moving towards the middle mile of its freight business. In recent years, Amazon’s last mile delivery service, from ubiquitous delivery trucks with the company’s smiley face arrow logo to UAV distribution under test, has attracted widespread attention. < / P > < p > however, the e-commerce giant is quietly making efforts in another little-known area: the transportation of goods from Amazon’s warehouse center to the manufacturing center and the port, which is known as the middle mile distribution. It is reported that by the end of 2019, in the United States, Amazon has used a new project to transport more than two-thirds of its goods between warehouses across the company. This new project can help small independent freight companies to book work. In this way, Amazon can greatly reduce its dependence on large third-party freight forwarders. Two years ago, most of Amazon’s goods were handled by these big companies. < / P > < p > Amazon is also exploring other ways to further capture the middle mile distribution market. According to three current and former employees, the company also launched a new plan to lease Amazon’s trucks to small freight companies. The project has never been reported in the media before. < / P > < p > according to a person familiar with Amazon’s ambitions in the field, Amazon’s goal is far more than being the main carrier of its own goods. The company quietly launched a new freight service in May, allowing freight companies to hire their own truck drivers to transport goods for Amazon and other non Amazon retailers, including dollar general. This is also part of Amazon’s long-term plan to become the top five freight forwarders in the United States, serving large group customers. At the same time, the person familiar with the matter said Amazon also faces competitive pressure from industry giants such as C.H. Robinson and XPO logistics. < / P > < p > but in the process, Amazon also encountered some setbacks. Amazon has refused to expand training programs to turn warehouse workers into commercial truck drivers because of the high turnover rate of commercial truck drivers, a person familiar with the matter said. In addition, the epidemic has led to a surge in online shopping orders and a serious shortage of truck drivers. As a result, recently, Amazon has been forced to befriend the previously alienated freight forwarders and give them more business. < / P > < p > however, these efforts prove once again that there are few categories that Amazon does not intend to touch, whether it’s streaming video, Satellite Internet services or cloud computing. Freight cost is the second largest operating expense category of Amazon, second only to the first largest operating expense – the cost of consumer goods sold by Amazon, and far exceeds the expenditure on technology, marketing and content. Amazon spent $39.7 billion on freight in the first nine months of this year – including the middle mile and last mile distribution – up 58% from the same period last year, according to the company’s documents. < / P > < p > in theory, controlling more transportation in its own hands can provide Amazon with more ways to control costs. However, so far, Amazon has only used this advantage to provide customers with faster delivery services. From third day delivery to overnight delivery to same day delivery, Amazon has been trying to shorten shipping times for the past decade, as it believes that shorter delivery times can attract consumers to shop online. As a result, freight costs account for as much as 16% of the company’s total operating expenses so far this year, compared with less than 11% in 2015. < / P > < p > “Amazon is growing so fast, and they’ve added so much capacity in a very short period of time – everything they’ve done strategically, in my opinion, is to make sure they have the ability to do things well and thus firmly hold their destiny in their own hands,” says mark wolfrat, President of mwpvl international. Mwpvl international is a consulting firm that studies Amazon’s logistics and transportation network. In response to questions about the report, Amazon spokesman Kate kudner said: “we have many long-distance transportation service providers in our ground transportation network, and we have been working with them for a long time to transport goods for Amazon. We are very happy that we can promote the development of thousands of small and medium-sized enterprises, and we are also committed to improving the capacity of the middle mile transportation network to serve our consumers. ” < / P > < p > most of Amazon’s middle mile business belongs to a relatively new division within the company, Amazon transportation services (ATS), which took shape in 2015, according to two former employees. The two former employees said ATS’s main goal is to reduce Amazon’s dependence on large third-party freight forwarders by launching an internal one mile business. Currently, the head of ATS is David bozman. Bozman reports to David Clarke, senior vice president of global operations, one of Amazon’s most powerful executives. (Amazon recently announced that Clark will be promoted to CEO of Amazon’s consumer business early next year.) Bozman has two generals under him: Wes Herman, who is in charge of ATS operations and operations, and Stephen amanto, who is responsible for the products and technologies in the Department. At present, ATS is more like an umbrella organization with various departments related to the middle mile business. One of the most well-known is Amazon air, a freight route that transports long-distance packages between Amazon warehouses. Amazon has leased more than 80 cargo planes and is building regional hubs to handle air parcels. ATS also includes Amazon’s network of 69 U.S. parcel sorting centers. Here, the staff will classify the packages by zip code. < / P > < p > in 2018, Amazon began testing a platform similar to Uber, matching the company’s and other shippers’ cargo transportation tasks for independent commercial truck drivers in five states. Finally, the platform is integrated with relay, another application developed by Amazon. Relay can help drivers plan their route to Amazon warehouse center. The combined platform, known as “relay for carriers”, allows small freight companies to apply for access to Amazon’s internal transport network, as well as book and ship available Amazon goods on a freelance or short-term contract basis after validation. < / P > < p > a former ATS employee said that in 2018, relay changed the type of Amazon’s middle mile carrier partner. Before 2018, companies like Knight swift transportation and XPO logistics – which provide transportation services to large companies by outsourcing their work to their own independent freight carriers – undertook the middle mile transportation of most Amazon goods, the former employee said. < p > < p > by the end of 2018, small carriers using relay undertook more than half of Amazon’s total cargo volume. By the end of last year, the number had risen to more than two-thirds. < / P > < p > in April 2019, Amazon officially began to provide intermediate transportation services to shippers on the east coast at a price far below the market price, which made the freight industry feel uneasy. Freightwaves, a freight data company, in an analysis report in June 2019, compared Amazon’s offer to shippers for 30 different routes with dat’s price in the world’s largest freight market. It was found that the service launched by Amazon made little profit, even no profit, because the fees charged by Amazon to the shippers were lower than those from the market, but they were given to drivers The remuneration is equal to the market price. < p > < p > Amazon’s approach is a bit similar to Uber’s. Uber provides low-cost travel services to passengers in the form of loss, while at the same time, it attracts drivers with high remuneration, so as to occupy more shares in the transportation market. (recently, Uber has been criticized for giving drivers less than they used to be.) < / P > < p > former employees of ATS revealed that relay platform has built-in protection mechanism to ensure that the remuneration of freight drivers will not be significantly lower than the market price, even if Amazon’s pricing algorithm predicts that the carrier may be willing to accept lower remuneration. For Amazon, building a large-scale transportation network of small self-employed carriers is the top priority, while profit is secondary. < p > < p > a person familiar with the matter said that Amazon has already extended the freight project to the whole country and is also striving to win over small shippers and large corporate customers. In 2020, Amazon has invested a lot of resources into the project to strengthen its sales team, so as to sign more valuable contracts with large customers and small and medium-sized customers. < / P > < p > in order to promote the development of the middle mile business, Amazon has taken the purchase of customized Amazon brand equipment as its primary task from the very beginning, first investing in trailers, then trucks towing trailers. Amazon hopes the investments will help it become an ideal partner for small freight companies, which usually don’t have their own trailers, and that these trailers, as mobile billboards on highways, will also help Amazon raise its brand awareness, a person familiar with the matter said. < / P > < p > over time, Amazon has purchased about 30000 53 foot trailers with the company’s brand logo to provide loading and unloading transportation services. This feature allows Amazon’s warehouse center employees to load before picking up, saving a lot of time on each route. Amazon also installed telemetry for each of its trailers to track the exact location of each shipment in real time and adjust delays and other distributions before cascading delays occur. < p > < p > Amazon has purchased thousands of custom tractor trucks through agreements with car makers Volvo and Kenworth. These trucks are equipped with a driver facing camera from smartdrive. Based on the vehicle’s internal video, these cameras can use machine vision to monitor the driver’s facial expressions, eye movements and other behaviors, and detect signs of distracted driving or inattention. < / P > < p > for a long time, truck drivers have been under the monitoring of employers through GPS and other technologies. In recent years, they have had to be closely monitored by their employers, in part because federal regulations require employers to install electronic recorders designed to ensure that they do not drive for long periods of time. However, most truck drivers believe that Amazon’s installed technologies are aggressive and highly sensitive, such as yawning or blinking frequently, which are marked as risky by the system. < / P > < p > in the second half of last year, when tractor trucks with Amazon’s smiley face appeared on the road, Amazon proposed a new project aimed at attracting truck drivers in the middle mile. < / P > < p > based on the documents learned and the descriptions of three current and former employees, Amazon began to invite truck drivers to join a program called “Amazon freight partners.”. After joining the program, truck drivers can rent effectively