Amazon has unveiled its plans to invest $4 billion in its rural delivery network expansion this 2026, but is it a move against Walmart? Here’s the scoop.
$4 billion investment
The world’s biggest eCommerce giant has revealed it will invest $4 billion by 2026 to expand its delivery network and boost shipping speeds in rural areas of the United States.
“Once this expansion is complete, our network will be able to deliver over a billion more packages each year to customers living in over 13,000 zip codes spanning 1,200,000 square miles – an area the size of Alaska, California, and Texas combined,” Udit Madan, senior vice president of the company’s worldwide operations, said.
Moreover, this investment will lead to less populated areas being covered by over 200 delivery stations, which prepare packages for the last leg of shipping. That means by the end of next year, the company will have tripled in rural delivery network size to reach thousands of locations, even reaching the North Pole.
Also, by the end of 2026, Amazon will have tripled the size of its rural delivery network to provide Prime members in tiny towns and rural communities the ability to shop from more than 300 million items and receive their packages in the quickest period possible.
It was in 2020, the pandemic era, when Amazon opened its first rural delivery station, then scaled its small-town delivery network around three years later. This push has led to average delivery times being cut in half for these places, which is good.
Against Walmart?
However, analysts are saying that those moves are part of a preemptive move against Walmart. Will you believe this? Start your account here to share your thoughts.
“They are doing this in response to Walmart,” stated experts from parcel management and consulting firm ShipMatrix, led by Satish Jindel. “Walmart is catching up with them [in eCommerce] and building its own network of delivery drivers using the Uber and Lyft concept of independent gig drivers who use an app to accept packages.”
In recent years, Amazon and Walmart are head-to-head rivals to FedEx, the UPS, and the United States Postal Services in the parcel shipping network. The two companies are leading the pack in capturing most of the growth in the domestic parcel market.
“Walmart is not as prevalent in rural areas. Amazon wants to make sure that Walmart doesn’t get there with some other way,” Jindel further pointed out.
Meanwhile, media reports also discussed how Amazon could use its platforms, such as Flex, to support rural deliveries.
What does this story make you feel? Share your thoughts with the world, your family, and your friends by sharing this article online. Stay tuned for more stories like this.