Amazon Pumps Another $1.9 Billion into Delivery Network Amid Rising Costs

Amazon.com Inc (NASDAQ:AMZN) has committed $1.9 billion to its Delivery Service Partner program in 2027, a significant investment that aims to lift driver pay to a national average of nearly $24 an hour. This represents a 16% increase from three years ago and is part of Amazon's ongoing effort to improve the efficiency and safety of its delivery network.

The company has now invested a total of $21.7 billion in the program across its eight-year history, with much of this expenditure going towards driver compensation. By increasing pay, Amazon hopes to reduce turnover rates among drivers, which can be expensive for the business due to the need for repeated training and familiarization with delivery routes.

Amazon's investment in its delivery network is also driven by a desire to improve safety records. The company reports that serious vehicle crashes across the network fell by over 23% last year, a decline that it attributes to increased spending on safety measures.

The use of AI technology is another key aspect of Amazon's delivery strategy. The company plans to deploy more than 20,000 AI Smart Delivery Glasses in the field by the end of 2027, which will provide drivers with navigation and delivery details without the need for a phone. This technology has the potential to reduce the cost of each delivery over time.