Amazon (AMZN) – Get Amazon.com, Inc. Report moves an awful lot of stuff in a whole lot of different ways. The company has a fleet of planes that bring goods to its fleet of trucks so they can be delivered by the company’s fleet of third-party delivery vans.
It’s a massive operation that provides the backbone of the retail giant’s backbone. If one piece of the puzzle fails then goods don’t get where they are going in a timely fashion and customers have shown they have very little, if any, patience.
In fact, it may be fair to say that Amazon’s entire retail business hinges upon getting goods where they need to be in a timely fashion. And that may be why during Feb. 3’s fourth-quarter earnings call Amazon CFO Brian Olsavsky, Amazon’s chief financial officer, stressed the importance of transportation.
“We have to work to now make our operations more efficient as we get staffing levels up, and we’re going to plow a lot of our effort into increasing our transportation speeds and beating our pre-pandemic levels,” he said, according to a transcript of the call. “So, there’s a lot of different challenges going on right now.”
Image source: TheStreet.
Amazon Promises “Fast, On-Time Delivery”
Olsavsky said has added “significant transportation assets to ensure fast, on-time delivery” as the company looks to increase control of all aspects of its delivery services.
Part of that drive includes putting money into electrical vehicle companies.
Amazon has a roughly 18.1% stake in the electric cargo vehicle maker Rivian Automotive (RIVN) – Get Rivian Automotive, Inc. Class A Report, according to a filing with the Securities & Exchange Commission.
Olsavsky noted that the company’s fourth-quarter net income includes a pre-tax valuation gain of $11.8 billion related to its investment in Rivian, which went public in November.
Early this year, Rivian reported production figures in line with lowered guidance it offered in December. Separately, Rivian said COO Rod Copes, had left the company.
Amazon also reached an agreement with global automobile manufacturer Stellantis (STLA) – Get Stellantis N.V. Report to be the first commercial customer for its Ram ProMaster battery electric vehicle that will launch in 2023.
In addition, the Seattle-based tech giant reported that it now owns 5.2% of Aurora Innovation (AUR) – Get AURORA INNOVATION, INC. CLASS A Report, a self-driving vehicle technology company that went public in November through a special purpose acquisition company merger. Amazon first invested in Aurora in 2019.
In December 2020, Uber Technologies (UBER) – Get Uber Technologies, Inc. Report has sold its self-driving car division to Aurora and invested $400 million in the company, giving it a 26% ownership stake.
Amazon Also Looks to the Air
Aurora said in September that it would begin “regularly and autonomously hauling” FedEx (FDX) – Get FedEx Corporation Report loads with a safety driver between Dallas and Houston, a 500-mile round trip along the I-45 corridor.
“At the end of 2023,” the company said, “we will launch our trucking business and haul loads autonomously between terminals without a safety driver.”
Amazon also acquired the self-driving startup Zoox in 2020 for an estimated $1.3 billion. The company has nearly 1,000 developers and staff that has been working on perfecting driverless vehicle automation since 2018.
The deal hit a bump in the road on Monday when a Delaware judge ruled Zoox shareholders can see limited records on Amazon’s acquisition.
In what is being called a novel ruling, Chancellor Kathaleen McCormick allowed the shareholders to view the information for their appraisal petition, Reuters reported, tackling the issue of shareholder access to private company books and records after a merger has closed.
But Amazon’s transportation plans are not limited to terra firma.
The company also owns 20% of Air Transportation Services Group (ASTG) , having first invested in the air cargo operator in March 2021. The online retailer launched its cargo air fleet in 2016.
Amazon Air recently broadened its network into Kansas with a regional gateway facility at Wichita Eisenhower National Airport that will offer express delivery to Prime customers.
Going forward, Olsavsky said Amazon will continue to build up its transportation efforts.
“We still see additional levels of investment in that in 2022,” he said.
Source: https://www.thestreet.com/investing/beyond-rivian-amazon-has-a-slew-of-ev-investments-for-a-good-reason?puc=yahoo&cm_ven=YAHOO&yptr=yahoo