A look at Amazon's logistics operation. . .

[ChrissyOne]

This isn't directly Rivian related, but it's highly adjacent - it's a great look into the supply chain operation that Amazon has been building over the past decade. You keep getting your packages more or less on time because of the work they are doing in building their own containers and jets, and leasing their own ships to deliver to smaller ports that are less congested than LA and New York.
Now, we don't know the details of how Rivian may be involved in this story, beyond the 100,000 last-mile vans they've already ordered, but as former Amazon employee, I can tell you that for every bit you know about, there are 20 bits that you don't. Beyond the potential of solving the supply problems that plague Tesla and other auto makers, there are the obvious opportunities to replace more of these vehicles all over the world with EVs. Note that recent moves to 24/7 operations in LA come with a huge cost in added CO2 emissions, and Amazon is working against a goal of being carbon-zero by 2040. The most tantalizing bit comes toward the end, when they talk about the possibility of leasing out this new, cheap capacity to other companies.

In short, this what a Trillion-Plus dollar company looks like. Amazon builds everything they do for scale and efficiency. That goes from global logistics to the book publishing system I built for them. This is what to keep in mind when Musk talks about his supply chain nightmares.

And yes, this is a Rivian story as much as it's an Amazon story - don't forget, they own more of Rivian than RJ does. Rivian will be the foundation of their last-mile strategy, with the potential to scale globally and increase their footprint as battery technology evolves.

Sponsored

 

[thrill]

What a surprisingly well done (hey, it's MSNBC) video. Long ago, I used to head a theater-level wargaming group, with at times several thousand people globally engaging in, uh, engagement. We spent a few years writing a lot of code to make logistics a factor that required serious attention to participate with any chance of winning, causing the career logistics people now being brought into the game to nearly cry in joy that their generally ignored foundation to success was now a major factor, and that was poorly generally understood. Few commanders were happy to have to manage the logistics side of their endeavors, and TBH, it was hard to give the right level of fidelity vs actual training in an exercise that was only going to last a couple of weeks, though we did run it 24/7. The amount of preplanning and investment that Amazon willfully engaged in makes me literally LOL at the reactionary political crowing of "hey, we'll spend hundreds billions of dollars to upgrade ports now" instead of the mere single digits of spending that could have been done with any competent preplanning.

The inclusion of EVs, from trucks to vans to planes to eventually 2000 container ships is going to be interesting.

 

[3l3c7r1c]

I used to work at Amazon as well. Agree that the Amazon machine is working tirelessly to squeeze every bit, always look for ways making it more efficient. But they have lot of failed projects as well (I used to work in the phone project). Amazon's environment commitment came a lot later and 2040 is literally two decades away. Now I don't want my product to be made solely based on metrics and efficiency. There are other ways to be successful and great as well. I buy Patagonia products because of their quality and treating people and environment well.

 

[ChrissyOne]

I used to work at Amazon as well. Agree that the Amazon machine is working tirelessly to squeeze every bit, always look for ways making it more efficient. But they have lot of failed projects as well (I used to work in the phone project).

Certainly. My first job at Amazon was building imaging production for the daily deals product, AmazonLocal. That whole business eventually failed. But that wasn’t really a surprise, even when we were working on it. It was a money-losing business that tried to make it up in volume, and that worked as well as it ever does. Likewise, I was in Kindle Content during Fire Phone development, and most people I talked to thought it was a long shot at best. The awful app store experience alone was enough to doom it. But again, we kinda knew that at the time.
Global logistics is at the core of Amazon’s business, not a pilot project to sell more streaming content, so I don’t think you can compare the two. You are certainly correct that Amazon can fail at things. But they tend to fail fast, and be right, a lot. ?

 

[Craigins]

Long ago, I used to head a theater-level wargaming group, with at times several thousand people globally engaging in, uh, engagement. We spent a few years writing a lot of code to make logistics a factor that required serious attention to participate with any chance of winning, causing the career logistics people now being brought into the game to nearly cry in joy that their generally ignored foundation to success was now a major factor, and that was poorly generally understood. Few commanders were happy to have to manage the logistics side of their endeavors, and TBH, it was hard to give the right level of fidelity vs actual training in an exercise that was only going to last a couple of weeks, though we did run it 24/7.

One of the first projects I worked on at my job was an intra-theater logistics model for TEA/TRANSCOM.

Logistics is the most important part!

 

[thrill]

One of the first projects I worked on at my job was an intra-theater logistics model for TEA/TRANSCOM.

Logistics is the most important part!

We would manually move stuff around in the game to get it going and at needed times to impose certain conditions so reactions would have to occur which could be observed and counter-reacted to. From watching the participants though, I became convinced we could have built the models to optimally move things around, and then just let the players tweak it to their heart's content, because they'd most assuredly mess things up creating more work for themselves than needed.

 

[opnwide]

And yes, this is a Rivian story as much as it's an Amazon story - don't forget, they own more of Rivian than RJ does.

So full disclosure, how many shares of RIVN vs. AMZN do you own?

 

[ChrissyOne]

So full disclosure, RIVN vs. AMZN do you own?

Some. ?
More relevantly, I was in book publishing at Amazon and had zero connection with logistics, and no involvement in any plans with Rivian. I started following the company at the time of the announcement of the deal, much more interested in the delivery vans than the consumer models. I am building a long position in rivian, and trade the odd option. I am not currently being paid by either company.

 

[BrayBay]

Great video, thanks for sharing. It got really interesting toward the end. My first thought was that Amazon taking over its own logistics and then selling that service to third parties is exactly what happened with Amazon Web Services to sell spare computing infrastructure to accelerate the public cloud revolution.

As time goes on, it seems the Amazon investment in Rivian was a perfect match!

 

[RobDog11]

Great video, thanks for sharing. It got really interesting toward the end. My first thought was that Amazon taking over its own logistics and then selling that service to third parties is exactly what happened with Amazon Web Services to sell spare computing infrastructure to accelerate the public cloud revolution.

As time goes on, it seems the Amazon investment in Rivian was a perfect match!

Sponsored