Report. In August, Italian regulators fined Amazon for delivering mail without a license. Now, the same agency has awarded Amazon permission to build out its shipping infrastructure in competition with traditional carriers.

Amazon now has a license to deliver mail and compete with the Italian Post

Amazon has taken another step to consolidate its hegemony in the field of delivery services in Italy. Amazon Italia Logistica and Amazon Italia Transport have been added to the list of 4,463 authorized postal delivery operators, last updated on Nov. 16 and published on the website of the Ministry of Economic Development.

This is a significant change from the situation on Aug. 2, when the Italian Communications Authority (AGCOM) fined Jeff Bezos’ multinational €300,000 for carrying out postal delivery activities—including logistics, package delivery and the management of delivery centers—without authorization. This fine issued three months ago was for creating “a unified network to carry out the delivery of products of third-party vendors and the management of the delivery points,” regulators said.

Now it is clear that Amazon will be able to carry out all these activities just as before, while being monitored by AGCOM. This marks the moment when Amazon has officially entered the package delivery market in Italy, where it will compete with the Italian Post.

Amazon’s relationship with the Italian Post was updated on June 13, with a deal that will last for three years, renewable for another two. As a result of this agreement, the Post, under the leadership of Matteo Del Fante, will now have the capacity to deliver packages in the evening and during weekends, taking advantage of the extensive network of Amazon storage facilities that have begun to sprout up like mushrooms all over Italy. For now, there are nine of them: Avigliana (Turin), Origgio (Varese), Rogoredo and Buccinasco (Milan), Crespellano (Bologna), Calenzano (Florence), Vigonza (Padua), Pomezia and Fiano Romano/Passo Corese (Rome).

The company’s total investment in Italy so far has amounted to €800 million, with 3,000 employees on the payroll since 2010, the year when the multinational expanded to our country. In February 2018, 10,000 companies were selling their products through the Amazon Marketplace digital platform, which generated sales of €350 million in 2017.

The platform also provides access to the European markets, as well as to those in North America, Japan, China and India. According to Amazon Italy, their service led to the creation of 10,000 new jobs in the companies using their platform: 4,000 in the north of Italy, 2,000 in the center, 3,000 in the south and 900 in the islands.

On Nov. 26, the Italian Post exceeded its previous record for packages delivered, with over one million delivered in one day. During the previous week, it had handled a total of 2.3 million deliveries. “We could not avoid doing this deal with Amazon,” Del Fante said. “It is the leading e-commerce operator. We have also signed agreements with the Chinese Alibaba and the European Ynap.”

Amazon has a particular interest in the 30,000 postal workers employed by the Italian Post. The company is committed to ensuring that 10,000 workers will be employed in logistics by 2020 as part of the “Joint Delivery 2022” model, which is set to extend delivery times until 7:45 p.m. on weekdays, as well as on weekends. Plans have been announced for 4,000 new hires between 2018 and 2022.

We should look at this situation in connection with what is happening in the US, where the US Postal Service (USPS) earned record profits in 2017 with more than 850 million packages delivered in the period between Thanksgiving and New Year’s Day. The growth of e-commerce in the US has mitigated the fall in profits in the traditional mail delivery sectors, where USPS lost $2.7 billion during the last fiscal year.

These losses prompted President Trump to open up another front in his war against Bezos, but for the wrong reasons. For USPS, digital platform capitalism is an instrument to withstand the current crisis; accordingly, its deal with Amazon—whose terms have not been made public—seems to have come at the perfect time. According to analysts, by 2023 the share of packages delivered by USPS will decrease from 63 percent to 45 percent, in favor of Amazon (which will invest $100 billion in logistics to compete with FedEx and UPS) and the couriers operating through their platform.

A similar scenario is playing out in Italy as well. As in other countries, Amazon now plays the role of operating the logistics infrastructure for the local Post and other mail carriers, while, at the same time, it competes against them directly in the package delivery sector.

Subscribe to our newsletter

Your weekly briefing of progressive news.

You have Successfully Subscribed!