It was a bullish beginning for South Carolina's newest automobile plant — a one-shot order for 20,000 vehicles, straight out of the chute.
And Wall Street is taking note of the Palmetto State production.
It's not so much the size of the transaction with Mercedes-Benz Vans that's drawing the attention. Rather, it's the name of the company driving the deal. The buyer, in this instance, was Amazon.com, the 800-pound disruptor of the retail jungle and other assorted industries.
That has some wondering whether Jeff Bezos and his seemingly unstoppable e-commerce colossus are looking to shake up a business that's been dominated for decades by the likes of FedEx, UPS and the U.S. Postal Service.
Amazon is aiming to get its boxed goods to its customers faster than Walmart and the rest of the pack. The latest piece of that strategy began to unfold at the opening of the Mercedes plant in North Charleston a few weeks ago, when the big Sprinter van order was unveiled to support the online retailer's new "Delivery Service Partner" program.
Amazon is tapping into the crowdsourcing model by recruiting independent freelancers to lease and operate its in-house fleet of cargo vehicles. The South Carolina-made vans are expected to be built and on the road within a year. They'll be designed to haul "anything and everything" that Amazon offers, according to Dave Clark, senior vice president of worldwide operations.
"There is no limit to what they can do," Clark said at the Mercedes-Benz Vans plant opening event on Sept. 5.
Clark also mentioned that Amazon was "blown away" after "tens of thousands" of applications poured in from would-be participants in the delivery venture. The response prompted the company to supersize its original Sprinter order to 20,000 vans from 5,000.
The idea is part of Amazon's goal to take more control of the "last mile" in its delivery chain. Inc. magazine put the size and scope of the strategy into context.
"Obviously, Amazon is massive," contributing editor Bill Murphy Jr. wrote. "But the idea of creating a network of private delivery companies that's functionally about a fifth the size of the U.S. Postal Service, and doing it within a matter of months — that's pretty darn impressive."
For now, at least, the two big private-sector package carriers most likely to be squeezed by the encroachment on their e-commerce turf are downplaying the threat.
During an earnings call last week, an analyst asked FedEx CEO Fred Smith and his senior managers whether Amazon is looking to take a bite of their bread-and-butter.
Marketing chief Raj Subramaniam fielded the question. He quickly reminded listeners that Amazon "is a longstanding customer of ours" but not the largest.
"While there has been significant media interest in what Amazon is doing to expand their in-source delivery capabilities, this should not be confused as competition with FedEx," Subramaniam added. "The global infrastructure, the technology, the capabilities, knowledge that are needed to compete in our business is quite extraordinary, and we have built that up over 40-plus years."
United Parcel Service Inc. CEO David Abney was asked to weigh in on Amazon's delivery ambitions in late April, several months before the Sprinter order was announced.
"It's very hard to predict what Amazon or any other of our large shippers are going to do," Abney responded. "And we make sure that we evaluate any market moves, whatever impact it would have on our business, and then we monitor and we react accordingly."
He went on to say that UPS is "the vendor of choice" when it comes to e-commerce deliveries.
"It's a fast-growing opportunity that we're best-in-class, and our network is scalable, difficult to match because of the density and our diverse customer base," Abney said.
Not every logistics expert is convinced that the big incumbents are safe from Bezos' deep pockets and disruptive tendencies. John Larkin, a managing director at the investment bank Stifel, was quick to mention Amazon's South Carolina van deal during a panel talk at the FTR Transportation Conference earlier this month, according to a report by FreightWaves.com
"That would make me nervous if I was sitting in Atlanta at UPS or at FedEx," Larkin said.