As Amazon has grown to dominate the ecommerce industry, they‘ve had to conquer a major logistical challenge: delivering online orders to the doorsteps of rural residents in far-flung locations. It‘s a hurdle that many retailers struggle with, since rural deliveries often mean higher costs, longer distances, and a lack of infrastructure. But Amazon has built a sophisticated delivery network that allows it to reach customers even in the most remote corners of the country.
According to the Census Bureau, almost 20% of the US population lives in rural areas defined as counties outside of cities and suburbs. And these rural shoppers are increasingly buying online. A 2018 study by the National Retail Federation found that ecommerce adoption rates in rural areas were just 4 percentage points behind urban areas, at 73% vs 77%. However, the study also found that rural customers spend about 10% less per order on average, likely due to a combination of lower incomes and higher shipping costs.
So how does Amazon overcome the barriers to serve this important rural customer base? The foundation is its partnership with the United States Postal Service (USPS). By law, USPS is obligated to deliver mail and packages to every residential address in the nation, regardless of how remote. Amazon capitalizes on this by handing off a large share of its rural-bound packages to USPS for "last mile" delivery from the nearest mail distribution center. Essentially, Amazon does the long haul, and USPS covers the last leg to the customer‘s door.
But Amazon‘s rural delivery network goes beyond just relying on USPS. They‘ve developed an extensive logistics system powered by advanced algorithms, route optimization technology, and mapping tools specifically designed to handle rural deliveries. For example, the Amazon Logistics routing system (AMZL) can automatically plot out the most efficient delivery path, even in spread out rural areas with unnamed roads or confusing address numbering. It also factors real-time traffic, weather conditions and construction into the routes.
Amazon‘s proprietary mapping tool is another key piece of technology. It provides detailed satellite imagery and step-by-step directions to remote delivery locations. For extremely hard to find homes, Amazon instructs drivers to take photos of the delivered package to confirm it was dropped off at the correct spot.
When even USPS can‘t reach an address directly, Amazon has some creative back-up plans. They‘ll deliver to post office boxes, or to Amazon Hub Counters inside partner retail stores, where customers can retrieve packages at their convenience. In some markets, Amazon is even experimenting with autonomous delivery methods like drones and sidewalk robots to cover the last stretch to rural homes.
"Our goal is to ensure every customer can get what they want from Amazon, delivered right to their doorstep, no matter where they live," said Rena Lunak, an Amazon spokesperson. "We‘ve built out our network to enable deliveries to over 99% of US households, including a high bar for coverage in rural zip codes."
Indeed, a 2019 analysis by Rakuten Intelligence found that Amazon can reach 72% of the total US population with same-day or next-day delivery speeds. That‘s largely thanks to the rural delivery infrastructure. For comparison, Walmart only covers 65% with next-day speeds, and Target just 36%.
That‘s not to say Amazon‘s rural delivery operation is without challenges. Recruiting and retaining delivery personnel is difficult in remote areas. Lack of paved roads, unreliable rural mapping data, and unmarked homes can lead to lost or damaged packages. And the economics of rural delivery are tough – it costs significantly more in fuel and labor to deliver one package down a remote country road than dropping off several orders in a dense city area.
But Amazon‘s size and delivery volume gives it an advantage in overcoming these obstacles. With over 100 fulfillment centers across North America, Amazon can forward-position inventory closer to rural demand to shorten delivery distances. The Amazon Flex crowdsourced delivery program recruits independent contractors in rural communities to handle last mile deliveries in passenger cars. Higher order volume allows Amazon to gain efficiencies even in spread out delivery zones.
Still, there‘s room for improvement in the rural delivery ecosystem. Adding more regional USPS distribution hubs would cut down on the distance packages need to travel for last mile delivery. Amazon could beef up installation of their secure delivery lockers and counters in remote towns to give customers more convenient pickup options. Forming partnerships with local delivery companies who are experts in navigating the back roads could increase delivery speeds and reduce failed deliveries. At a government level, improving infrastructure like road quality and broadband access in rural areas would have ripple effects that benefit ecommerce deliveries.
Amazon continues to invest heavily in innovations to enhance their rural delivery capabilities. In 2020, they launched a $1.2 billion improvement effort to put more inventory closer to customers, which is especially impactful for rural areas. They‘ve also started building out their own rural last-mile delivery network in some markets, with delivery stations and AMZL-branded vans to supplement the USPS partnership.
"Deliveries are the hardest part of ecommerce in rural areas," said Marc Wulfraat, President of the logistics consulting firm MWPVL International. "But Amazon is willing to lose money on these orders because they are playing the long game. They want to be the everything store for everyone, no matter their address."
So, can you count on getting Amazon orders delivered to the most remote locations? The answer is most likely yes, although with some caveats. Expect longer delivery times of 3-7 business days in most cases. Expedited options like same-day, next-day or even 2-day Prime shipping probably won‘t be available. And you may need to take a drive to the nearest post office or Amazon Hub Counter location to pick up your package if your home is too remote for direct delivery.
But the bottom line is, Amazon‘s unmatched rural delivery infrastructure means you have access to the biggest selection of online goods from your countryside abode. So whether you‘re ordering supplies for the ranch or books for a backwoods cabin, the Amazon delivery network will find a way to your door.
