Delivery Service Partners (DSPs)
Around 2014 Amazon launched the first generation of DSPs, which were contracts with large regional and nationwide couriers that own their own branded fleet of vans to handle last mile delivery from distribution hubs.
The benefit of the DSPs was Amazon could rely on a network that was familiar with all the localized problems as well as nuances around staffing. Over the next few years, Amazon found that they were too concentrated with their last mile delivery partners. This made them too reliant on the performance of one entity, they did not have leverage on rate / pricing negotiations, it was easier for large scale company drivers to unionize, and there was a lack of quality control.
To solve these issues, Amazon launched their DSP 2.0 program which creates more fragmentation in the last mile delivery. In this updated DSP program, Amazon assists in the launch of smaller DSPs through the leasing of branded Amazon vans, hiring and payroll resources, back-office software tools for scheduling, and driver support.
Amazon now caps total vans at 30-40 per contractor, avoiding all the partner concentration issues from the DSP 1.0 model. Amazon also launched their proprietary Mentor app that tracks numerous data points on drivers to monitor safety and delivery speed, giving them more quality control at the corporate level. There are currently 2,500 DSPs and 158K workers with a shortage of DSP contractors in nearly every major city.