We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon
Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
-- Courier says it won’t renew contract for U.S. air services
-- Focus will be on other customers such as Walmart, Target
FedEx Corp. said it wouldn’t renew its U.S. air-delivery contract with Amazon.com Inc., paring a key customer relationship as the largest online retailer deepens its foray into freight transportation.
The delivery giant will instead focus on “serving the broader e-commerce market” with U.S. package volume from online shopping expected to double by 2026, according to a FedEx statement Friday. The Amazon contract expires at the end of this month, and doesn’t cover international services or domestic operations at other units such as FedEx’s ground deliveries.
FedEx’s surprise move signals that the No. 2 U.S. courier will bank on smaller e-commerce customers that lack Amazon’s bargaining power for big volume discounts. Amazon’s emergence as a logistics giant is piling pressure on FedEx and United Parcel Service Inc. for cheaper and speedier deliveries, as the e-commerce powerhouse builds its own aircraft fleet and delivery capabilities.
“They know their Amazon business is going to continue to shrink,” said Satish Jindel, founder of SJ Consulting Group, referring to FedEx. “Why have your capacity be used up by a customer that’s going to continue to chip away? They’d rather use that capacity for other customers.”
FedEx rose less than 1% to $158.17 at 2 p.m. in New York. The shares erased gains on the company’s announcement about Amazon before recovering some of the lost ground. Amazon held steady, trading 2.7% higher at $1,801.10.
“We respect FedEx’s decision and thank them for their role serving Amazon customers over the years,” the Seattle-based retailer said in a statement.
FedEx said Amazon represented 1.3% of sales last year. Jindel estimated that FedEx’s domestic air-parcel business with Amazon is probably “a few hundred million a year, at the best.”
The Memphis, Tennessee-based courier said Amazon wasn’t its largest customer. In an email, FedEx said it would focus on customers such as Walmart Inc., Target Corp. and Walgreens Boots Alliance Inc.
“There is significant demand and opportunity for growth in e-commerce, which is expected to grow from 50 million to 100 million packages a day in the U.S. by 2026,” FedEx said in the statement. “FedEx has already built out the network and capacity to serve thousands of retailers in the e-commerce space.”
Earlier this year, Amazon announced its Scout sidewalk delivery robot. At the time, details were sparse, except for the fact that the company had started to make deliveries in a neighborhood in Washington State. Today, at Amazon’s re:Mars conference, I sat down with Sean Scott, the VP in charge of Scout, to talk about how his team built the robot, how it finds its way around and what its future looks like.
These relatively small blue robots could be roaming a sidewalk near you soon, though as of now, Amazon isn’t quite ready to talk about when and where it will expand its network from its single neighborhood to other areas.
“For the last decade, we’ve invested billions of dollars in cargo planes and delivery vans, fulfillment center robots, and last holiday period, we shipped over a billion products with Prime free shipping,” Scott told me. “So it’s my job as VP of Amazon Scout to bring another new, innovative, safe and sustainable solution to this delivery network to help us really grow quickly and efficiently to meet customer demand.”
Currently, in Amazon’s trial, the robots are always accompanied by human assistants. Those assistants — and they probably look a bit like robot dog walkers as they trot through the neighborhood — are currently the ones who are taking the packages out of the robot when they arrive at their destination and put it on the customers’ doorsteps. For now, that also means the customers don’t have to be home, though chances are they will have to be once this project rolls out to more users.
As of now, when it’s ready to make deliveries, Amazon drives a large van to the neighborhood and the Scout robots leave from there and return when they are done. Scott wouldn’t say how far the robots can travel, but it seems reasonable to assume that they could easily go for a mile or two.
As we learned earlier this year, Amazon did make a small acquisition to kickstart the program but it’s worth stressing that it now does virtually all of the work in house, including building and assembling the robots and writing the software for it.
“For Scout we’re actually owning the entire development from the industrial design to the actual hardware, mechanical, electrical, the software, the systems, manufacturing and operations,” said Scott. “That really helps us control everything we’re doing.” Having that end-to-end control enables the team to iterate significantly faster.
The team even built a rig to test the Scout’s wheels and in the process, learned that the wheels’ material was actually too soft to survive the rigors of daily sidewalk driving for long.
Inside its labs, the team also built a sidewalk environment for real-world testing and did most of the initial training in the real world but also heavily relies on working with simulations now. Indeed, since there are basically no maps for navigating sidewalks, the team has to build its own maps of every neighborhood it goes into and it then uses this highly detailed map in its simulation.
That’s important, Scott noted, because simply using a game engine with repeating textures just wouldn’t be good enough to train the algorithms that keep the robot on track. To do that, you need real-world textures, for example.
“We thought about building a synthetic world, but it turns out building a synthetic world is much harder than copying the real world,” Scott said. “So we decided to copy the real world.” He showed me a video of the simulated robot moving through the simulation, using a map that looks a bit like a highly zoomed-in Google Maps 3D view. Not perfect, but perfectly reasonable, down to the gutters on the street and the small bumps where two concrete plates on the sidewalk line up.
This simulation allows Amazon to make thousands of simulated deliveries before the team ever goes out to test the robot on the street. In the demo I saw, the robot had no issues navigating around obstacles, pausing for crossing cats and getting to his destination. That’s possible thanks to a combination of detailed maps and high-resolution imagery of its surroundings, combined with GPS data (when available) and cutting-edge machine-learning techniques.
Once it is out and about, though, the robot will have to face the elements. It’s watertight, something you’d expect from a company that is based in Seattle, and it’s got sensors all around to ensure it can both find its way on sidewalks that are often littered with obstacles (think trash day) and full of curious cats and dogs. Around the robot is an array of cameras and ultrasonic sensors, all of which are then evaluated by a set of machine learning algorithms that help it plot its path.
“We jokingly refer to the sidewalk as the Wild West,” said Scott. “Every sidewalk is a snowflake and every neighborhood is a collection of snowflakes.”
At times, the robot also has to deviate from the sidewalk, simply because it is blocked. In those cases, it will opt for driving on the street. That’s something local laws in many states now allow for, though Scott tells me that the team only considers it when it’s a street where a pedestrian would also feel comfortable. “If you feel safe walking on that road, that’s where we want to be. We want to be viewed as a pedestrian and treated as a pedestrian,” he said. And that’s how the law in Washington State looks at these robots, which, for example, mean that they have to be given the right of way.
Scott also noted that the team designed the robot so it would be visible when necessary, with blinking lights when it crosses a street, for example, but also a bit boring, so that it would blend into the environment. “We really want this to blend into the background and be part of the environment and not be this loud and obnoxious thing that’s always rolling through the neighborhood,” said Scott. So it has the bright blue Amazon Prime color on top to be seen, but is otherwise relatively bland and without any anthropomorphic features. It’s just your average neighborhood delivery robot, in other terms.
As it moves along, it makes very deliberate movements, which Scott believes will make people feel more comfortable around it. Unlikely a drone, there’s no major risk when any parts of the robot break during a mission. Somebody can simply come and pick it up. Still, the team says it did design the robot with safety at the front and center of its process.
One thing that’s currently not clear — and that Amazon didn’t want to talk about yet — is how it will solve the actual handover of the package. Right now, the assistant handles this part, but in Amazon’s photos, the customer walks up to the robot and takes the package out of it. That’s a reasonable scenario, I think. In the long run, Amazon could also outfit the robot with multiple compartments to make multiple deliveries in one go.
One advantage of the robot has over human delivery people is that if you’re not home, it can just wait for a while, Scott said. So it’s conceivable that you’ll come home one day and there’s a Scout, standing patiently in front of your door, waiting to deliver your latest impulse order. Until then, it’ll likely be a while, though. Amazon won’t commit to any timetable or wider rollout.
AWS costs every programmer should know Jun 9, 2019 • David Hatanian
The title for this blog post is a direct reference to Latency Numbers Every Programmer Should Know. There are several versions of those numbers available now, and I could not find the original author with certainty. Some people attribute the original numbers to Jeff Dean.
When working on a project that will reach a certain scale, you need to balance several concerns. What assumptions am I making and how do I confirm them? How can I get to market quickly? Will my design support the expected scale?
One of the issues associated with scale, is the cost of your infrastructure. Cloud providers allow you to provisions thousands of CPUs and store terabytes of data at the snap of a finger. But that comes at a cost, and what is negligible for a few thousand users might become a burning hole in your budget when you reach millions of users.
In this article, I’m going to list reference numbers I find useful to keep in mind when considering an architecture. Those numbers are not meant for accurate budget estimation. They’re here to help you decide if your design makes sense or is beyond what you could ever afford. So consider the orders of magnitude and relative values rather than the absolute values.
Also consider that your company may get discounts from AWS, and those can make a massive difference.
Compute What’s the cost of a CPU these days? I used the wonderful ec2instances.info interface to extract the median price of a vCPU.
With 1 year convertible reservation (all up front)
With 3 years convertible reservation (all up front)
With spot pricing (estimated)
I estimated spot pricing based on anecdotal data I got from various sources. As the prices vary within a day and I could not find a reliable data source for it.
AWS represents the computing power of its machines in Elastic Compute Units, and 4 ECUs represent more or less the power of a modern CPU. So the prices above are for one CPU or core, not one instance.
Here’s the price of 1 ECU in $ per hour across all instance types I looked at:
And here’s how on-demand compares with 1 year and 3 year reservations (both convertible, upfront payments):
Storage So you want low latency, high throughput and are planning to store everything in Redis? Then on top of those CPU costs, you’ll need to pay for RAM.
I used the same approach to extract the median price of 1GB of RAM on EC2. Elasticache is more or less twice as expensive for on-demand but prices drop quite quickly when looking at reserved instances.
Median monthly cost
1 GB RAM
1 GB RAM 1 year convertible reservation (all up front)
1 GB RAM 3 years convertible reservation (all up front)
WASHINGTON (Reuters) - Walmart Inc on Wednesday announced a sweeping overhaul at Jet.com, an online start-up it acquired in 2016 for $3.3 billion, after it failed to live up to the world’s largest retailer’s e-commerce ambitions.
FILE PHOTO: Walmart's logo is seen outside one of the stores in Chicago, Illinois, U.S., November 20, 2018. REUTERS/Kamil Krzaczynski _________________
Walmart said it will integrate Jet.com’s retail, technology, marketing, analytics and product teams with its own online business. The current president of Jet.com, Simon Belsham, will leave in early August.
Walmart’s move reduces the scope and importance of Jet.com in its overall U.S. e-commerce business, which competes with Amazon.com Inc, according to interviews with six vendors, two consultants and three Walmart employees.
Jet.com, which was expected to boost Walmart’s reach particularly with city dwellers and millennial shoppers, failed to become a driver for online grocery sales and growing market share in urban areas, the sources added.
Walmart has put more emphasis on shopper perks such as same-day delivery and curbside pickup of groceries ordered online, focusing on food and grocery sales using those delivery methods. Jet, as a platform to sell similar items, has fallen by the wayside, the sources added.
The Jet overhaul is the latest sign that Walmart is attempting to fix the ways it reaches shoppers using different websites and delivery methods. Earlier this year, it ended a delivery partnership with Google-backed Deliv and last year Reuters reported its struggles to use its own employees to deliver products.
Multiple large and medium-sized consumer goods companies that do business with both Walmart and Jet have told Reuters they began noticing Walmart executives buying less of their merchandise to sell through Jet.
The reductions in Walmart’s order sizes for its Jet unit, they said, started in March, when many vendors began discussing business priorities with Walmart for the 2019 fiscal year.
In 2016, Jet forecast revenue of $1 billion and according to recent estimates from consulting firm Kantar, which was shared with some vendors, the company’s sales shrunk to $689 million in 2019.
The data from Kantar also shows the number of U.S. households that shopped on Jet.com in January 2019 was 2%, down from 3% during the same period three years ago, forcing Walmart to recalibrate using Jet as a platform to drive online grocery sales.
Several vendors, who told Reuters they were keen to introduce new packaging and pricing on Walmart.com and Walmart-owned websites like Jet this year, said the retailer told them to look for ways to push more sales on Walmart.com going forward and not spend resources on a new strategy for sales of their merchandise on Jet.
Walmart merchants are also informing grocery, apparel and electronics suppliers that want to introduce new products online that Jet is not a priority, according to vendor sources.
Separately, current and former Jet employees told Reuters that Hoboken, New Jersey-based Jet, is struggling to keep up its sales momentum and hit revenue goals. Two retail consultants, who advise Walmart on e-commerce and online grocery, have confirmed to Reuters that Jet is failing to keep pace with Walmart’s internal sales goals.
They said Walmart has de-prioritized the business and is focusing more on growing sales through its namesake website and offering a broader assortment of fashion and accessories through the multiple smaller brands like Moosejaw, Modcloth, Bonobos, Eloquii, Hayneedle and others it has acquired in the past few years to attract millennials.
The retailer has previously said it expects losses from its online business, including Jet.com, to increase this year, without giving additional details. In the most recent quarter, Walmart’s online sales grew 37% and Marc Lore, founder of Jet.com, who Walmart hired in 2016 to run its U.S. e-commerce operations, is still leading the business.
In 2018, the first cracks in Jet’s business started to appear when Walmart’s CEO said the retailer’s marketing efforts will always be centered on Walmart.com as it is cheaper to acquire a new customer nationally with such a strategy and it is investing fewer ad dollars in Jet. He said the retailer will target Jet’s investments in urban markets, where the business is “well-positioned to grow.”
A study from a retail analytics firm the same year found shopper traffic on Jet.com had declined in March, a study Walmart said then was inaccurate and not reflective of a trend.
Going forward, Kieran Shanahan, who oversees Walmart’s food, consumables, health and wellness categories, will be responsible for Jet.com’s strategy and management, in addition to his current role.
Reporting by Nandita Bose in Washington; Editing by Lisa Shumaker