Hundreds are expected to lose their jobs in South Jersey as Amazon ends its delivery model experiment

Nearly 300 delivery-service contractors are expected to be laid off in South Jersey this fall, as Amazon shuts down a logistics pilot program that partnered with nascent delivery companies for same-day delivery using Kia Soul vehicles.

The 298 employees of KRP Transport LLC based in Burlington City are set to be laid off on Sept. 25, according to a layoff notice filed with the state. Among them are two dispatchers and 196 delivery associates.

The Philadelphia Business Journal first reported on the layoffs earlier this week.

The workers provide “last mile delivery of packages,” according to the layoff notice. KRP is part of Amazon’s Delivery Service Partner program, which outsources package delivery services.

In 2023, Amazon contract delivery partners, such as KRP, started used Kia Souls for same-day deliveries. That delivery model is coming to an end, Bloomberg reported last week, and Amazon will turn to gig workers, who use their own vehicles, to complete those deliveries.

Customers using same-day delivery will not see an impact, and the rented Kias used for the program will be returned to the vendor, according to Amazon.

“We’re always working to innovate our last mile delivery network — which is why we tested expanding the Delivery Service Partner (DSP) program into Same-Day Delivery operations,” Amazon spokesperson Steve Kelly said in an emailed statement on Wednesday.

Kelly added that after gathering feedback for over a year from customers, delivery partners, and those working at same-day delivery facilities, the company “determined that the DSP model isn’t currently the right fit for Same-Day Delivery, and we’ll be moving away from it.”

Amazon has said that it continues to be committed to the Delivery Service Partner program, which allows it to partner with contractors for deliveries.

KRP Transport LLC did not immediately respond to a request for comment on Wednesday.

Amazon’s Delivery Service Partner program is a method of outsourcing package deliveries by enlisting aspiring businesspeople who agree to launch a delivery business, including hiring and managing a team of employees. Since the program started in 2018, Amazon says, it has led to the launch of over 4,400 delivery businesses.

Media reports have both highlighted the success of the program and the challenges for the contracted businesses. One woman in Austin, Texas, built a multimillion-dollar company as a partner to Amazon with dozens of vans and associates delivering packages, Business Insider reported in 2023. But others have said it was sometimes difficult for these contractors to meet delivery expectations, according to a Bloomberg report in 2021.

Amazon has said it will help impacted employees find local work with other delivery contractors.

“We appreciate the contributions from participating [Delivery Service Partners] and their teams, and we’ll provide support throughout this transition,” Kelly said Wednesday.

KRP will continue to be an Amazon delivery partner, Amazon said, via a delivery facility in Kearny, N.J.

A job listing on Glassdoor.com, looking for an “Amazon Delivery Service Partner Driver” in Kearny as part of the KRP Transport LLC team, advertises that workers are offered an hourly rate of $22.75 and receive paid training, time off and overtime, as well as health insurance and benefits.

Amazon has grown its presence in the Philadelphia area in recent years.

The company announced earlier this month that it will invest $20 billion to build data centers in Pennsylvania.

During the pandemic, the company doubled its number of warehouses in the area, and in 2021, Amazon had some 57 facilities built or in the pipeline in the Philadelphia metropolitan region, The Inquirer reported. Amazon also listed over 35,000 job openings in the region in 2020 — the most of any employer in the area.