Despite Amazon’s direct shipping, local couriers report steady demand

While some courier service operators were initially apprehensive about Amazon’s direct delivery to Jamaica this year, many are now breathing a sigh of relief as the e-commerce giant’s decision has had minimal impact on their businesses.

Amazon, a global technology and e-commerce leader, began offering direct shipping to Jamaica last year. The company, which already delivers to over 100 countries and regions, requires customers to provide either a passport or a taxpayer registration number if the value of the items exceeds the Jamaican Government’s duty-free limit of US$100.

But Jermaine Newman, co-founder of ipCourier, told The Gleaner that the cost of shipping directly from Amazon has been a major deterrent for Jamaican customers.

“If you are going with Amazon, chances are you’re spending more money,” he stated.

Currently, Amazon charges J$4,089.53 (US$25.96) for standard global shipping, and J$4,706.42 (US$30.53) for its global priority shipping.

In contrast, the average cost per pound shipping to Jamaica via a courier service ranges from J$550 (US$3.52) to J$900 (US$5.73).

In addition, a customs fee, which Amazon refers to as import fees deposit, is required if the cost of the item exceeds US$100.

Amazon’s key selling point has traditionally been its fast shipping service. However, Newman noted that with the rise of other eCommerce retailers like Shein and Temu, customer expectations have shifted, and many shoppers are now more willing to wait for their packages.

“The companies that have the volume now coming into the island, Amazon is way up there, but Shein and Temu are right behind them. Especially over the last month, we saw an increase maybe of 20 per cent with Shein orders, so the reality of it is that it’s not a huge impact,” he said.

Online teenage shoppers are more likely to shop via Shein and Temu, while young adults and businesspeople, who value better convenience, will turn to Amazon.

DOMINANCE DECREASING

Although Amazon still holds the largest share of the Jamaican e-commerce market, Newman noted that its dominance is gradually decreasing, from 70 per cent in 2018 to around 60 per cent today.

Newman’s freight and courier company has been in operation for six years, with bases in Kingston and Portmore. In October, it opened its first warehouse in Miami in response to increased demand. Previously, his company used a third-party warehouse for shipments.

“America sells culture. That is their biggest export. So every year, their holidays like Thanksgiving and Christmas become a more popular thing across the world, and a part of that is commodities spending. Every year, more persons are buying into those sales and into those deals that they have,” he said.

Jordan Trought has been operating his Ocho Rios and Brown’s Town, St Ann-based Gshipping freight forwarding company for three years. He pointed out that some items on Amazon are not available to be shipped directly to Jamaica, and that impacts the customer experience.

“If Amazon should widen their selection as to what is being shipped to Jamaica, then we will see an impact, but what it is now, what they are shipping, not everything will be sent to Jamaica. Once that is possible, then we will definitely feel it,” he said, adding that if Amazon slashes its shipping costs to the island, it would deal an even more significant blow.

Another courier service operator, who requested anonymity, told The Gleaner that he, too, was anxious about Amazon’s foray into the island. However, he is confident that his emphasis on customer service will help him stay afloat.

He shared that he has five locations islandwide, ships up to 8,000 packages to the island weekly, and is currently looking forward to the increased business from the busy Christmas shopping season.

sashana.small@gleanerjm.com