• ITVI.USA
    11,367.920
    -1,484.510
    -11.6%
  • OTLT.USA
    3.515
    0.122
    3.6%
  • OTRI.USA
    20.260
    0.880
    4.5%
  • OTVI.USA
    11,347.230
    -1,482.560
    -11.6%
  • TSTOPVRPM.ATLPHL
    2.580
    -0.120
    -4.4%
  • TSTOPVRPM.CHIATL
    3.550
    0.030
    0.9%
  • TSTOPVRPM.DALLAX
    1.300
    0.010
    0.8%
  • TSTOPVRPM.LAXDAL
    3.710
    0.060
    1.6%
  • TSTOPVRPM.PHLCHI
    2.140
    -0.010
    -0.5%
  • TSTOPVRPM.LAXSEA
    4.100
    -0.100
    -2.4%
  • WAIT.USA
    136.000
    -3.000
    -2.2%
  • ITVI.USA
    11,367.920
    -1,484.510
    -11.6%
  • OTLT.USA
    3.515
    0.122
    3.6%
  • OTRI.USA
    20.260
    0.880
    4.5%
  • OTVI.USA
    11,347.230
    -1,482.560
    -11.6%
  • TSTOPVRPM.ATLPHL
    2.580
    -0.120
    -4.4%
  • TSTOPVRPM.CHIATL
    3.550
    0.030
    0.9%
  • TSTOPVRPM.DALLAX
    1.300
    0.010
    0.8%
  • TSTOPVRPM.LAXDAL
    3.710
    0.060
    1.6%
  • TSTOPVRPM.PHLCHI
    2.140
    -0.010
    -0.5%
  • TSTOPVRPM.LAXSEA
    4.100
    -0.100
    -2.4%
  • WAIT.USA
    136.000
    -3.000
    -2.2%
Air CargoBusinessCompany earningsE-commerce & FulfillmentLast-mile deliveryModern ShipperNewsParcelWarehouse

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

Not much else to complain about, though, as company posts stellar first-quarter results

During a quarter when, again, virtually everything went right, Amazon.com Inc. (NASDAQ:AMZN) CFO Brian Olsavsky, pressed by an analyst on what part of its business needs improvement, was able to find a fly in the ointment.

Amazon’s one-day shipping service has still not found its groove in the U.S. after being derailed by the avalanche of parcel-delivery volumes throughout 2020 as well as an acute shortage of warehouse space, Olsavsky said. He did not provide specifics on where Amazon is and where it needs to be. In Europe, Amazon has restored one-day shipping to satisfactory metrics, he said.

Other than that, there wasn’t much to complain about on a day when Amazon posted very strong first-quarter results. The Seattle-based e-tailer posted first-quarter revenue of $107.1 billion, a 41% increase over 2020 results. Operating income doubled to $8.9 billion, while net income tripled to $8.1 billion.

On a diluted basis, the Seattle-based e-tailer posted $15.79 in per-share earnings, compared with $5.01 in the year-earlier quarter. The median estimate from 15 analysts polled by Barchart was $9.75 a share. In after-hours trading, shares were up 2.5% after rising during the regular session.

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.

Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.

We are glad you’re enjoying the content

Sign up for a free FreightWaves account today for unlimited access to all of our latest content

By signing in for the first time, I give consent for FreightWaves to send me event updates and news. I can unsubscribe from these emails at any time. For more information please see our Privacy Policy.