Amazon has begun hiring its own drivers in Germany and plans to open 11 more distribution centres to expand its delivery business in its second biggest market, the firm's German logistics chief said in an interview.
It is part of a global effort by the online retailer to build an air, sea and land transport network to help it offer faster deliveries and try to contain shipping costs, which have steadily increased as a percentage of sales.
"If we have last-mile in our own hands we can offer more services like same-day delivery," Bernd Gschaider, Germany director for Amazon Logistics, told Reuters at a distribution centre outside the southern city of Mannheim.
Gschaider said its move was designed to help it cover increased volumes but it poses a challenge to major logistics firms like Deutsche Post DHL, Hermes and DPD, which rely on the ecommerce giant for a large chunk of their parcel business.
It also comes at a time when the delivery business in Germany is under fire over the practices of subcontractors. Most big delivery firms, including Amazon, employ their drivers via small and medium-sized subcontracted firms.
German police raids in February found a third of subcontractors it targeted were not paying drivers the minimum wage or making proper social security deductions.
The German cabinet is expected on Wednesday to approve proposed legislation to make logistics firms liable for the behaviour of their contractors, imposing fines if they are caught breaking strict labour laws. Gschaider said the legislation would not have any impact on Amazon's business as it already demands that subcontractors make sure their drivers do not work for too many hours, with its auditors performing spot checks to make sure they are complying.
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