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Amazon Is Struggling To Hold On To The Pilots Who Ship Your Packages

Amazon’s promise of one-day shipping has led it to increasingly rely on its own air cargo division, Amazon Air. But as the number of shipments pushed through the cargo arm multiplies, the pilots who fly those packages continue to voice that they are overworked and underpaid.

The pilots don’t work for Amazon directly, but are employed by the contractors Air Transport Services Group (ATSG) and Atlas Air. More than 200 cargo pilots who fly for ABX Air, which is a division of ATSG, cast a vote of “no confidence” against management’s ability to resolve ongoing labor disputes, reported Reuters earlier this week. In total, all but one member of the pilot’s union voted “Yes” on a resolution that asked if they had “no confidence in management’s willingness to negotiate or reach an agreement for the benefit of all stakeholders to include the shareholders, the customers, and the employees.”

The pilot union, the Airline Professionals Association, has battled with the management of ATSG for five years to negotiate new work rules for its pilots. Issues involving how pilots are scheduled for their routes, salaries, and retirement still remain unresolved.

Those who fly for Atlas Air, another cargo operator used by Amazon, recently lost a three-year bid to secure a new work contract. Atlas pilots protested outside an airport in Cincinnati, Ohio for better workplace conditions in April. And in February, Atlas pilot crashed an Amazon Air flight, killing all three of its occupants, which some have suggested was linked to its staff being overworked.

Pilots at both airlines have complained about low morale, low pay, and poor workplace retention. Such troubles are brewing during a global pilot shortage, and many well-trained pilots who work for Atlas and ABX have simply left for better opportunities. A union survey earlier this year found that 60% of the pilots who work for the three airlines employed by Amazon (ABX Air, Atlas Air, and another called Southern Air) are looking for work elsewhere.

“We still have very experienced high quality pilots leaving for other carriers because they have better pay and better schedules,” Rick Ziebarth, an ABX Air pilot and executive council chairman of Airline Professionals Association Teamsters Local 1224, told Quartz. Ziebarth argued that as a result of well-trained pilots leaving, ABX is forced to hire people with far less experience who require more training. Quartz has reached out to Amazon for comment on the matter.

Worker grievances appear to have cropped up in every leg of Amazon’s supply chain. Amazon’s warehouse workers were found to suffer injuries at twice the national average of other warehouse workers, according to an investigation from Reveal. Delivery drivers for Amazon Flex, who are considered independent contractors by Amazon, work long hours with no chance of earning overtime or benefits.

ABX Air pilots won’t be able to strike until released from the US National Mediation Board (NMB), the federal agency which oversees aviation industry labor relations. Ziebarth said the board is still in the middle of holding negotiations with ATSG.

According to data from Flightpath Economics, a consulting firm, pilots who work for ABX Air and Atlas Air are amongst the lowest paid in the industry.

Company Pilot pay per hour
ATSG $152
Atlas $139
Fedex $243
UPS $288

As a whole, cargo pilots face tougher working conditions than their passenger pilot counterparts. Cargo pilots were left out of a 2014 law that required passenger pilots to get a minimum of 10 hours’ rest between flights. Aviation experts also say that lax safety standards and pilot fatigue has lead to a higher number of fatal crashes on cargo flights compared to passenger flights.

Meanwhile, Amazon’s air shipments are only likely to continue rising. FedEx in June announced it would no longer assist Amazon in its air delivery. That same month, Amazon announced it would roll out free one-day shipping for millions of new products. These combined factors have led to the e-commerce giant to rely on its own delivery services than ever before.

In July, Amazon Air flew 136 million pounds of goods across in the US, a 29% increase from the same period in 2018, and only 9 pounds less than the December 2018 holiday rush, according to data from ATSG and Atlas Air analyzed by Cargo Facts Consulting. And the growth simply won’t die down this holiday season, when Amazon expects to invest $1.5 billion into one-day shipping costs alone.

Amazon founder Jeff Bezos has said that his company will rely less on airplanes as it builds out its local warehouses. But for now, Amazon is continuing to grow its air cargo operations: it added 15 more planes to its fleet this year, and says it expects to have 70 planes by 2021. It is working on a $1.5 billion expansion of its Amazon Air Hub in Cincinnati—essentially an Amazon cargo airport—which is expected to finish in 2021.

When complete, the Air Hub will be able to handle 200 daily takeoffs and landings. It recently opened an Air Hub in Fort Worth, Texas.  It seems that as long as demand is high, the future of Amazon’s fast and free shipping will rely heavily on air freight.

By: Amrita Khalid

Source: Amazon is struggling to hold on to the pilots who ship your packages

1.22M subscribers
Amazon aims to compete with FedEx and UPS in the logistics and shipping industry. That’s what analysts told CNBC after Amazon Air recently expanded to 50 planes and announced it will open a $1.5 billion air hub in Northern Kentucky in 2021. Amazon is handling up to 26% of its own shipping, meaning FedEx, UPS and the U.S. Postal Service are losing a portion of Amazon’s business. FedEx says it’s not worried, but Morgan Stanley reports the major shippers have already lost 2% revenue to Amazon Air. » Subscribe to CNBC: http://cnb.cx/SubscribeCNBC About CNBC: From ‘Wall Street’ to ‘Main Street’ to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more. Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: http://cnb.cx/LikeCNBC Follow CNBC News on Twitter: http://cnb.cx/FollowCNBC Follow CNBC News on Google+: http://cnb.cx/PlusCNBC Follow CNBC News on Instagram: http://cnb.cx/InstagramCNBC #CNBC #Amazon #AmazonAir As Amazon Air Expands, FedEx And UPS May Suffer

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Amazon Almost Killed Target. Then, Target Did the Impossible

In 2017, everyone was laughing at Target.

Sales had continued to slide. Stores were in disrepair. And company leaders were struggling to adapt to the changing behavior of consumers–many of whom were shopping more and more with online retailers like Amazon.

As fellow retailers Macy’s, J.C. Penney, and Gap collectively shuttered hundreds of stores because of similar struggles, analysts said Target should do the same.

But Target executives, led by CEO Brian Cornell, had a different idea. The key to revitalizing Target, they said, was to go on the offensive.

So, in March 2017, Target made a huge announcement: It planned to invest over $7 billion in a turnaround strategy that would include:

  • remodeling existing stores (and opening smaller ones in urban areas);
  • introducing new, private label brands; and,
  • enhancing its digital shopping experience.

Wall Street thought the plan was a disaster. On the day of the announcement, Target suffered its largest stock plunge in almost a decade.

But fast-forward to today, and Target is thriving. First-quarter results for 2019 beat analysts’ expectations. The store’s private-label lines are exploding. And as comparable store sales continue to rise, the stock price is trading at an all-time high.

How did Target do it?

A close look at the company’s brilliant turnaround strategy reveals some major lessons for businesses of any size.

Here are some highlights:

Think long term.

When Target announced its turnaround plan, Cornell expected backlash. He knew investors would hate the idea of stuttering profits for the foreseeable future.

But he held fast to his plan. “We’re investing in our business with a long-term view of years and decades, not months and quarters,” Cornell said at the time.

Cornell knew this reset was necessary because so many Target stores had fallen into disrepair over the years. And while the company was making efforts in e-commerce, it simply didn’t have the infrastructure to deliver.

Contrast that with today. Target has remodeled hundreds of stores, and it has built a hundred “mini-stores” in urban areas like New York and on college campuses (with plans to open dozens more of these every year for the foreseeable future). The company also invested heavily in its e-commerce operations to great benefit. (More on this in a minute.)

By focusing on the long-term health of the company instead of short-term financial performance, Cornell took a page out of Jeff Bezos’s playbook–and it clearly worked.

Leverage your strengths.

Target’s e-commerce infrastructure needed a complete revamp. But could the company really compete with Amazon and Walmart, which were years ahead of the curve?

It could–by doing things a little differently.

Target execs knew that as popular as e-commerce has become, the majority of retail shopping still takes place in physical stores–especially when it comes to clothing.

So Target chose to focus on a model that would maximize its strengths. Known as “ship-to-store,” Target’s e-commerce platform turns physical stores into mini warehouses for online customers. That makes it possible for customers to order a product online, and then pick it up in a store on the same day.

Ship-to-store reduces Target’s shipping and handling costs, and takes advantage of already existing space in physical stores. And if a customer decides to do some shopping while already there at Target, the benefit is two-fold.

Fill a gap.

Consumers had once affectionately referred to Target as “Tarzhay,” an ode to products and style that were affordable yet a step above those offered by competitors like Walmart. Over time, though, Target had created too many labels that were clear misses.

“Tarzhay” had lost its cachet.

But nobody had stepped up to fill that gap of stylish, exclusive clothing for lower prices. So, in an effort to rebuild its reputation, Target doubled down on its exclusive brands. The company has launched 20 private-label lines over the past three years, including brands for modern furniture, kids’ clothes, electronics, and home goods.

The investment paid off: Six of Target’s private-labels each do more than a billion dollars in annual sales. These labels, together with other brands sold exclusively at Target,  contribute nearly a third of the company’s overall revenue (and an even greater percentage of profits).

In addition, Target has worked hard to fill gaps left by unsuccessful competitors. For example, when stores like Toys “R” Us and the Sports Authority went bankrupt, Target saw this as opportunity: market share begging to be gobbled up.

Yes, Target has definitely gotten its groove back. It did so by bucking analysts’ advice, and instead returning to basics:

Thinking long-term. Leveraging strengths. Filling gaps.

I guess Target got the last laugh after all.

By: Justin Bariso Author, EQ Applied

Source: Amazon Almost Killed Target. Then, Target Did the Impossible

1.48K subscribers
Target is one of the biggest retailers in America, but nowadays even the biggest retailers like Sears and Toys R Us have gone bankrupt with the rise of Amazon. This video describes how Target not only survived Amazon, but beat Amazon in the online e-commerce space. Sources: https://bit.ly/2Itw7EE https://bit.ly/2QVZ9k4 https://cnb.cx/31eIAoj Music: Song: SKANDR – Blue Lemonade (Vlog No Copyright Music) Music promoted by Vlog No Copyright Music. Video Link: https://youtu.be/iV1ca6K9VBM Song: KSMK – Forget All (Vlog No Copyright Music) Music provided by Vlog No Copyright Music. Video Link: https://youtu.be/7rkO5DyLoTE Song: KSMK – Just my imagination (Vlog No Copyright Music) Music provided by Vlog No Copyright Music. Video Link: https://youtu.be/5v_zQANhToo Song: KSMK – You (Vlog No Copyright Music) Music promoted by Vlog No Copyright Music. Video Link: https://youtu.be/974y9fyIaG4 Song: Dizaro – Sunset Beach (Vlog No Copyright Music) Music provided by Vlog No Copyright Music. Video Link: https://youtu.be/H–bOQgYsz0

Amazon Is Launching a New Program to Donate Unsold Products, After Reports That Millions Were Being Destroyed

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Amazon wants its third-party sellers to make better use of their unsold or unwanted products that often get dumped — by giving them away to charity.

Amazon is launching a new donations program, called Fulfillment by Amazon (FBA) Donations, for third-party sellers that store their inventory in Amazon’s warehouses in the U.S. and UK, CNBC has learned. Starting on September 1, the donation program will become the default option for all sellers when they choose to dispose of their unsold or unwanted products stored in Amazon warehouses across those two countries. Sellers can opt out of the program, if they want.

The donations will be distributed to a network of U.S. nonprofits through a group called Good360 and UK charities such as Newlife and Barnardo’s. After this story was published, Amazon announced the program via a blog post on Wednesday afternoon.

The new donations program is designed to reduce the amount of inventory that must be dumped from Amazon’s warehouses, helping the environment and putting otherwise wasted products to some use. Recent reports found that Amazon routinely discards unsold inventory, with one French TV documentary estimating Amazon to have destroyed over 3 million products in France last year. Given that Amazon generates the bulk of its sales in the U.S., the number of destroyed inventory in its U.S. warehouses is likely much larger than those found in other countries.

“This program will reduce the number of products sent to landfills and instead help those in need,” Amazon wrote in the email to sellers announcing the launch.

Sellers who spoke to CNBC said the new program makes it cheaper to donate their unwanted inventory. Amazon charges 50 cents to return unsold inventory to sellers, much more than the 15 cents charged for disposal. Sellers destroy their inventory for a variety of reasons, including returns that are no longer usable or for safety issues.

In an email statement to CNBC, Amazon’s spokesperson confirmed the launch of the new program, adding it’s “working hard” to bring the number of destroyed products to zero.

“At Amazon, the vast majority of returned products are resold to other customers or liquidators, returned to suppliers, or donated to charitable organizations, depending on their condition,” Amazon said.

By: Eugene Kim

Source: https://www.cnbc.com/

 

Walmart And Target Are A Step Ahead Of Amazon

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Traditional brick and mortar retailers Walmart and Target are a step ahead of Amazon in the delivery battleground: while Amazon is offering 1-day delivery Walmart and Target are already moving to same-day.

That’s according to retail equity analyst John Zolidis.

“It may be tempting to think that Amazon investing $800 million to move its Prime offer of 2-day shipping to 1-day delivery will put incremental pressure on large retailers,” he says.  “However, this move is not a surprise.  We spoke with Wal-Mart (WMT) CEO Doug McMillon about this in October last year. He told us that same-day delivery, not 1-day delivery, was going to be the real battleground.”

McMillon is right. As was discussed in a previous piece here something has changed in the retailing industry in recent years.

Instead of fading away into the archives of history, brick and mortar retailing has come back to complement and support on-line retailing. Shoppers are placing orders online and are picking up merchandise at neighborhood stores, saving time and avoiding shipping fees.

That’s especially the case for groceries, where speed of delivery is a crucial factor in maintaining freshness.

The merging of online retailing with traditional retailing has provided an advantage to retailers with extensive neighborhood store presence like Walmart and Target. “Both WMT and Target (TGT) are already at a huge advantage over AMZN in this respect — because both retailers already have product stored within a short driving distance of the vast majority of the U.S. population in their respective 1,000’s of stores,” notes Zolidis. “Further, both retailers are offering not just delivery (Target already has same-day delivery via Shipt) but various options for BOPIS (buy online pickup in store).

Amazon, Walmart, and Target Shares YTD

Amazon, Walmart, and Target Shares YTD

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Then there are pick up points to enhance convenience. “WMT now has pickup towers in-store and are installing these across the chain, and it has established drive-through pick-up grocery lanes and is continuing to add these at a rapid pace,” adds Zolidis.  “Target is offering similar services and installing dedicated counters for customers to more conveniently grab items on the way home from work or after picking up kids from school. Target will also bring pre-ordered items out to your car in the parking lot.”

The strategy has been paying off. The two retailers have reported a rebound in both online sales and retail sales in recent quarters.

Simply put, Walmart and Target have changed the game in the retailing industry. And they have brought Amazon back into the world of the neighborhood store it once sought to eliminate by acquiring traditional retailers like Whole Foods — and by planning to open more grocery stores around the country to cater to markets not served by Whole Foods, as recently announced.

That’s why Zolidis thinks that investors would be making a mistake selling Walmarts and Target’s shares at this point.

“In our opinion,” he concludes, “it would be a mistake to sell large retailers on this announcement (WMT & TGT) as they have anticipated this for some time and are already rolling-out corresponding services.”

My recent book The Ten Golden Rules Of Leadership is published  by AMACOM, and can be found here. 

I’m Professor and Chair of the Department of Economics at LIU Post in New York. I also teach at Columbia University.

Source: Walmart And Target Are A Step Ahead Of Amazon

Amazon Shares Drop After Q3 Sales Fall Short And Holiday Outlook Disappoints – Andria Cheng

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Amazon.com AMZN +7.24%, facing growing competition on all fronts led by Walmart, reported disappointing third-quarter sales, sending its shares lower in after-hours trading. Sales in the quarter ended Sept. 30 rose 29% to $56.6 billion, compared with the consensus Wall Street estimate of sales rising above $57 billion. Sales would have risen 30% without the negative impact of a stronger dollar that hurt translated overseas sales by $260 million……

Read more: https://www.forbes.com/sites/andriacheng/2018/10/25/amazon-shares-drop-after-q3-sales-fall-short-and-holiday-outlook-may-disappoint/#202775e83048

 

 

 

 

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