Amazon’s Free Shipping Brings Israeli Postal Services to State of Chaos

Sources say that to meet its terms with Amazon, Israel Post is prioritizing Amazon packages at the expense of others, causing severe delays

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An employee places packed goods on a container at an Amazon distribution center in Moenchengladbach, Germany, December 17, 2019.
An employee places packed goods on a container at an Amazon distribution center in Moenchengladbach, Germany, December 17, 2019.Credit: Ina Fassbender / AFP

The end-of-year sales from major international retailers, namely Amazon’s free shipping to Israel, have produced volume that’s delaying the delivery of all kinds of mail.

Israel Post is struggling to handle the sharp increase in its number of parcels, and industry sources say this is slowing everyday operations.

In September, Israel Post signed a package distribution agreement with Amazon. Currently the agreement covers packages ordered from Amazon sellers in Israel, while packages sent from abroad are delivered by other local delivery companies, including the local subsidiaries of UPS and DHL.

According to some sources, to meet its terms with Amazon, Israel Post apparently decided to prioritize Amazon packages at the expense of others, and possibly also at the expense of other international commerce websites. As a result, packages from other sites are being delayed, with delivery times taking weeks and sometimes even months.

“There’s no one who can pick up my packages for export, and Israel Post representatives have told me they’re facing high volumes due to Amazon,” one customer said.

A senior source in the shipping industry added, “This year there’s a massive volume of packages. The postal service can’t let itself lose a customer like Amazon because this would lead to penalties and the customer would move on to a different delivery service. But this can damage service in other fields such as packages shipped within Israel.”

But Israel Post said that it is “facing high volume, like all the other logistics companies in Israel and around the world, due to the increase in orders. The claims involving Amazon aren’t true, and we do not comment on business matters.”

Another senior source in the industry also said he heard that Amazon package deliveries were receiving priority over other services, and potentially even at the expense of other customers. “What’s certain is there’s unusual dissatisfaction with the postal service this year,” the source said.

Amazon is known as a company that demands very high customer service from its service providers in every field, including shipping. For example, Amazon requires that its sellers within Israel deliver within five days.

According to postal service data published this week, over the past decade the number of packages arriving from abroad surged nearly five times to around 68 million packages this year. The total weight of the packages being handled soared nearly nine times.

Israel Post noted that Israel was named the OECD country with the fastest growth in online commerce, and one of the top 10 countries in terms of orders per capita on China’s Singles Day, when Chinese websites offer sales. Around 14.5 million packages are expected to arrive in Israel in November and December.

Along with the usual year-end sales – Singles Day, Black Friday and Cyber Monday – Amazon started offering free shipping to Israel on many orders of at least $49, and it unveiled a Hebrew-language web service. The hype surrounding the free shipping contributed to the massive boost in Amazon orders from Israel, which compounded the usual increase in online orders at the end of the year.

All this led to complaints of delays in packages being delivered, packages disappearing and no customer service from the post office.

A senior official at an Israeli company that works with Amazon said he was constantly hearing about problems at the post office. “Packages that were supposed to arrive by December 3 – there’s no sign of them,” he said. “That’s not something Amazon accepts, and neither do other major international websites.”

Israel Post can shake off responsibility for delays and buy more time to deliver packages by claiming that parcels are stuck in the intermediary phase after they leave the country of origin and before they are entered into the Israeli system.

During this phase, which is supposed to be brief, no entity has responsibility for the parcels, and it’s impossible to say whether they’ve disappeared or simply hit a delay. Under international treaties, Israel Post doesn’t take responsibility for packages until they’re scanned into its system.

Ultimately, most packages arrive, but a small number go missing, and no company or organization can say where they went.

Yonathan Ivgi, a marketing vice president for DHL Israel, said all shipping companies are facing a challenging period, but questions about preparation should be asked. “We’re also being challenged by the significant increase in operations following the November sales, which are still going on,” he said.

In previous years, volume increased 25%; this year it’s up 42%, he said. “We spent an entire year preparing for this period – we’re sorting packages at night, we’ve opened more service centers, we’ve hired more employees and even brought in an extra plane. Everything to support demand.”

A senior executive at another shipping company noted that it, too, had focused all its resources on handling the increase in volume. “At the postal service they didn’t prepare; they can’t handle the volume, and this creates delays and chaos,” he said.