Amazon Builds Out Network To Speed Delivery, Handle Holiday Crunch

Online retail giant has nearly doubled its fulfillment capacity since the start of the Covid-19 pandemic. From a report: In the past two years, Amazon.com has added workers at an unprecedented clip to keep up with a pandemic-induced surge in demand. As it has done so, an even bigger expansion drew less attention: The company is close to doubling the size of its fulfillment network. Amazon blanketed the country with more than 450 new facilities used to store, sort and ship items, according to logistics consultant MWPVL International, doubling down on a logistics empire that aims to deliver items in one day or less, and increasingly to do so without the help of third-party shippers.

Many of the new buildings are concentrated near big cities, putting more items for sale on the website closer to large population centers. The facilities also include more than two dozen smaller outposts stocked mostly with bestselling items, allowing the company to prepare for supply disruptions while also expanding fast-shipping capabilities, according to MWPVL. During the pandemic, Amazon put on hold its promise to deliver many items to customers in one day. Nevertheless, the company continued to build out a network capable of such a feat. The work prepared Amazon for an unusual holiday shopping season in which a national labor shortage and global supply-chain challenges have constrained the ability of many companies to obtain and deliver certain products in as timely a manner as they did in the past.

Amazon has encouraged customers to shop early this year due to the supply-chain issues, and company executives have said they are 'ready to deliver' and have been preparing for the holidays since the start of the year. As of mid-November, more than 98% of parcels that arrived at Amazon's delivery centers, which typically are in close proximity to packages' final destinations, were being delivered the next day, according to estimates from research firm ShipMatrix. At the same time, some items like household products and sporting goods were showing delivery windows of a few days, ShipMatrix said, emphasizing Amazon's message to shop early. Brian Olsavsky, Amazon's chief financial officer, said the company's inventory increased in preparation for the busy period. For the first time in a while, he said, the company is not capacity-constrained.

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