Amazon’s 1-day shipping in US still has work to do, CFO says

Amazon spent more than $17.1 billion on shipping in the quarter, a 57% year-over-year gain. Olsavsky said the company will continue to spend heavily through 2021 to refine its delivery network, with a focus on providing more granular information about package status. As for Amazon’s delivery expense structure, “we think our costs are competitive with our external options,” he said.

In a statement accompanying its quarterly results, Amazon said it is equipping delivery vehicles with camera safety technology and artificial intelligence to identify risky driving behaviors through the capture of real-time data. In a 2020 pilot covering more than 2 million miles of routes, the technology helped reduce crashes by 48% and stop sign violations by 20%, Amazon said. Incidents of drivers not clicking their seatbelts declined by 60%, while incidents of distracted driving decreased 45%, it said. 

The company guided to second-quarter revenue of between $110 billion and $116 billion, a 24% to 30% year-on-year gain. Operating income will range between $4.5 billion and $8 billion, compared with $5.8 billion. Amazon said its guidance assumes that the company’s annual Prime Day event will return to the June 2021 schedule, after being postponed to late fall last year due to the COVID-19 pandemic. 

The guidance also assumes a 200-basis-point tailwind from favorable foreign exchange rates, and about $1.5 billion in COVID-19 related costs, the company said.