WASHINGTON — Ever since Jeff Bezos started the website Amazon
to sell books, he has wrestled with how to deliver its products as
quickly and cheaply as possible. Today, Amazon, now a retail giant,
remains obsessed with this issue, building its own fleet of drones, buying trailers for trucks and signing up drivers for on-demand deliveries.
And
nowhere is the company’s push to become a logistics and delivery
powerhouse more evident than here in the nation’s capital. Amazon has
emerged as one of the tech industry’s most outspoken players in
Washington, spending millions on this effort and meeting regularly with
lawmakers and regulators.
Amazon
has pushed officials to allow new uses for commercial drones, to extend
the maximum length of trucks, to improve roads and bridges and to prop
up a delivery partner, the United States Postal Service.
The
efforts are mostly in the early stages, but Amazon already has
detractors, particularly for its drone efforts. Some drone makers argue
that Amazon is pushing too hard, too fast. And airline and pilots groups
have said opening the skies to more commercial drones, which are
remote-controlled flying machines, could create safety risks.
“Amazon
is disrupting huge industries; retail was a start, then the enterprise
market with its cloud platform and now transportation logistics,” said
Colin Sebastian, a senior analyst at Robert W. Baird. “This is Jeff
Bezos’s playbook, and achieving it by influencing legislation would be
consistent with that plan.”
The
money Amazon spent on lobbying in 2015 nearly doubled, to $9.4 million,
compared with the year before, which helped to pay a bigger lobbying
staff and pay for a new office to house them. The tally, compiled from
public records by the Center for Responsive Politics, includes only the
spending that Amazon must legally disclose.
Amazon’s
figure still lags those of some companies that made camp in Washington
long ago, like Boeing, which spent about $21 million in 2015. And it
trails the leading tech lobbyist, Alphabet, Google’s parent, by several
million. But Amazon’s spending grew at a faster pace than any other big
tech company’s.
When
Paul Misener, Amazon’s global head of policy, took over the company’s
Washington office 15 years ago, he had a staff of two focused on retail
tax laws and other technology-related issues. Amazon now has more than 60 people
listed as its lobbyists — both employees and contractors — double what
it had just two years ago, according to the data from the Center for
Responsive Politics.
The
lineup includes people as prominent as Trent Lott, the former Senate
majority leader, who helps persuade members of Congress. Representatives
for Amazon have met with lawmakers dozens of times in the last year.
The efforts also reached NASA, the postal commission and the Department of Transportation, among others.
Amazon
and Mr. Bezos, its chief executive, have other interests in Washington,
too. Amazon is now a major government contractor with a $600 million
cloud computing partnership with the C.I.A. And Mr. Bezos’s ownership of
The Washington Post, which he bought in 2013, gives him a foothold in
the political and media circles of Washington.
Amazon
declined requests to comment for this article. But on a recent earnings
call, Amazon’s chief financial officer, Brian Olsavsky, explained why
Amazon wanted to move more aggressively into delivery.
“To
properly serve our customers at peak, we’ve needed to add more of our
own logistics to supplement our existing partners,” Mr. Olsavsky said.
“That’s not meant to replace them.”
In
addition, the company’s shipping costs rose 19 percent, to $5 billion,
in 2015. The millions of members of its Prime annual subscription
service, Amazon’s most frequent customers, have helped feed the surge.
Those customers receive free shipping for many products.
Some
analysts expect Amazon eventually to take over its entire logistics
chain — in some cases, from factory to doorstep. Just this month, Amazon
signed a deal to lease 20 Boeing cargo planes.
A
few analysts got excited when Amazon referred to itself as a
“transportation service provider” in a recent regulatory filing. The
company, they suggested, could even become a competitor to UPS and
FedEx.
Mr.
Olsavsky insisted on the call that UPS and FedEx would continue to be
important partners. FedEx’s chief executive, Fred Smith, also played
down the possibility of Amazon becoming a rival. In a call with analysts
and investors last week, he criticized “fantastical” reports about
Amazon’s challenge to logistics companies.
Satish
Jindel, founder of the SJ Consulting Group, which advises
transportation and logistics firms, said, “If my package doesn’t get
delivered to my expectations, most people don’t think of FedEx or UPS.”
He added, “They think of the retailer, so Amazon is getting into drones
and delivery to enhance the customer experience and have a bigger
influence over the customer.”
Already, the company’s drone push
in Washington has had some success. Amazon has worked with NASA, for
example, to create an air traffic system that would establish lanes in
the sky for drones.
Amazon
has also urged Congress to adopt rules that would allow the retailer to
fly drones beyond a pilot’s line of sight, a crucial hurdle to Amazon’s
goal of operating drones from its warehouses. This effort is expected
to face an important test soon. This month, the Senate Transportation
Committee drafted a bill that would ensure rules for delivery drones
within two years.
Airline and pilot groups have resisted many of Amazon’s proposed changes.
“The
chances of a collision will go way up when you have more unmanned
aircraft up,” said Chris Dancy, a spokesman for the Helicopter
Association International, a trade group.
Some
drone makers said in interviews that Amazon’s bold statements may be
generating too much public angst, helping the safety advocates.
Amazon is arguing for changes in many other areas, too. Already, Mr. Misener, the lead lobbyist, has called
for an overhaul of an arcane system of international delivery rates
that he says give foreign e-commerce rivals an unfair advantage to
deliver to American homes.
He
also urged the approval of legislation that aims to improve roads,
bridges and railways. The bill was passed by Congress and signed into
law in December.
“The
private sector cannot make all the necessary improvements” in
transportation, Mr. Misener said in July during a Senate hearing, a
message that he has repeated to members of Congress. “Government needs
to keep up.”
Amazon
has backed a proposal for 33-foot twin-trailer trucks, vehicles that
would extend the current legal length of trucks by several feet;
opponents say longer trucks could make roads more dangerous for other
drivers.
“The
33-foot trucks are going to be safer,” Mr. Misener said last July,
“because there will be fewer of them on the road, driving fewer miles.”
The
proposal has been met with resistance from Ralph Nader, a longtime
consumer advocate. He said he wrote Mr. Bezos, asking Amazon to stop its
support of these trucks for safety reasons. He said Mr. Bezos never
responded. The proposal was rejected last year as part of a broader
transportation bill.
“Drones and longer trucks, what are all these efforts for?” Mr. Nader said in an interview. “To get you your toothpaste faster?”
Amazon Leans on Government in Its Quest to Be a Delivery Powerhouse
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