- Amazon is expanding its transportation network at a breakneck speed.
- And this holiday season, that network will be put to the test.
- Amazon's internal network of truck drivers will be part of that "peak season" push for the e-commerce company to prove itself as a transportation company, too.
- Here's what those truck drivers will make, according to an internal document obtained by Business Insider.
- Visit Business Insider's homepage for more stories.
Amazon will invest at least $3 billion this year on transportation as it seeks to make deliveries faster - and, some say, to launch a network that could compete with UPS and FedEx.
This year, the e-commerce giant has been investing with particular zeal into its trucking network. It bought hundreds of branded tractors this year to match its 10,000-plus branded trailers. That signaled an interest on Amazon's part to directly employ truck drivers rather than outsource that labor to other trucking companies.
Amazon also launched its own digital freight brokerage in April, where it undercut market rates by 26% to 33%.
And, last week, an internal document obtained by Business Insider showed that Amazon is revolutionizing one of the most-entrenched practices in the long-haul trucking industry: paying per-mile. Instead, the Seattle-based behemoth pays drivers per day.
The document also reveals where Amazon pays truck drivers the most and which cities will see an uptick in pay as peak season (the period between Black Friday and New Years' Day) descends upon the retail industry.
According to an internal company document viewed by Business Insider, Amazon has three pay categories for truck drivers: solo1, solo2, and team.
- Solo1 involves one day of work, in which the drivers leave from and return to their base cities. The shift is 14 hours long.
- Solo2 requires two days of work, or two 14-hour shifts. Truck drivers to spend their 10-hour rest break outside their base cities, most likely in a "sleeper cab," or a truck equipped with a bed and small kitchen.
- Team pay rates involve two truck drivers trading off shifts in order to keep the truck moving for days at a time.
An Amazon spokesperson confirmed the pay structure.
"This approach has been used for the past two years with the hundreds of line-haul service partners in Amazon's carrier network who have driven millions of loads this year globally," the representative told Business Insider.
"By offering a day rate, carriers are able to see exactly how much they'll make and know they'll be fully utilized and compensated," the spokesperson added. "We're proud of the positive partnership with our widespread carrier base who do a great job transporting packages for our customers."
Explore where truck drivers are getting paid the most in Q4, and which ones are getting a pay boost during the holidays
The spreadsheet indicates that drivers begin and end at airport hubs. They move loads and make deliveries from one hub to another for the entirety of their 14-hour shift, which is the maximum amount of time the federal government permits a truck driver to work,
In general, drivers in the regions that Amazon designated as Northeast, Midwest, Great Lakes, and Mid-Atlantic made above-average wages. That includes airport hubs like Newark, Detroit, St. Louis, Chicago (Midway), and Connecticut's Bradley International Airport.
Those familiar with Amazon's logistics network say those higher rates derive from the fact that those regions are high population and high density. So, truck drivers are able to move more goods in a shorter distance.
The same logic explains why certain regions pay less for drivers.
Meanwhile, the more disparate regions called Central, Southeast, and Southwest/Northwest had below-average wages. Miami, Dallas, Houston, Phoenix, Salt Lake City, and Portland all fell into those regions.
There was one glaring exception among those regions: Denver, Colorado. It the only city in the "team" category to get any pay boost for the peak season; the boost was significant at 24.3%.
Another exception in the data is Florida, where Amazon truck drivers can expect some of the lowest pay in the nation despite high population density. That's because there's a dearth of freight that moves from Florida to the rest of the US - a "dead end state."
