Amazon Has Doubled Its Fulfillment Network Since the Start of the Pandemic
If you ordered holiday presents from Amazon this year, you may be able to breathe easy that you’ll get the goods in time. Although the largest e-commerce retailer urged consumers to “shop early” this year, executives recently said they are “ready to deliver” on consumer demand, the Wall Street Journal reported.
As of mid-November, Amazon was able to deliver more than 98% of its packages within one day of their arrival at a delivery center, research firm ShipMatrix Inc. estimated. With delivery centers located in highly populated regions, most packages didn’t have far to travel on the so-called “last mile” of their journey. Likewise, household products and sporting goods are only taking a few days for delivery.
Brian Olsavsky, Amazon’s chief financial officer, said in a call with analysts that for the first time in a while, the retailer is not capacity-constrained. He said on the call, “We’ve made commitments that are larger than normal.”
Those commitments include opening more than 450 new facilities to store, ship, and sort items, according to WSJ. Amazon has also hired approximately 670,000 people since the end of 2019. With its global workforce now at 1.4 million and its fulfillment network nearly double its previous size, with 930 facilities across the U.S., Amazon is better prepared than ever to meet consumer demand this holiday season.
Additionally, the e-commerce giant is streamlining operations by opening facilities that double as fulfillment and delivery locations. By consolidating the supply chain process in this way, the retailer can expand its service to ship items within five hours in many cases, WSJ reported. By the end of 2021, Amazon will have opened roughly 30 such centers near their largest markets, stocking about 30 million of the company’s bestsellers for faster delivery. Over the next few years, more than 150 of these centers may open.
Amazon is also continuing to shift delivery responsibilities in-house, so to speak, delivering more than 56% of its own packages as of Q1 2021, according to research from Nielsen Consumer LLC.
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