Amazon’s fulfillment network got some attention this week after GlobeSt reported the company had signed at least 6 new leases in the first five months of the year, equal to the space it had signed leases for in all of 2023. All 6 were for spaces in the western part of the country. Two days later, the Wall Street Journal said Amazon’s “postpandemic pullback in logistics expansion” was over in an article titled, “Amazon Is Reviving Its Logistics Expansion and Reshaping Its U.S. Distribution – The country’s largest e-commerce retailer is leasing more warehouse space in a bid to speed up deliveries, respond to growing competition.”
The Journal was referencing the fact that pandemic demand had strained Amazon’s resources in 2020, with the company revealing in November 2021 that it had doubled capacity as a result, but by June of 2022, there were reports that the company found itself with excess capacity as online spending settled.
Pymnts picked up this week’s Journal story, and we extracted the following statistics:
Amazon operates in 413 million square feet of industrial real estate, which it has plans to expand by another 16 million square feet.
Amazon logistics is now split into 9 regions. (Amazon had announced the decision to decentralize its fulfillment network into 8 regions in April of 2023.) Decentralization requires third-party sellers who use FBA to store inventory across multiple locations.
Amazon has been leasing smaller warehouses in rural areas to serve as delivery stations, minimizing final-mile transportation costs.
Citing the Journal’s reporting, Pymnts said Amazon’s decision to decentralize its network last year and expand it this year was partly in response to Walmart’s utilization of stores to fulfill online orders, and partly in response to competitive pressure from Temu and Shein.
Amazon described the types of facilities that make up its fulfillment network on the AboutAmazon.com website, for readers interested in learning more about where their inventory may end up traveling through:
Sortable fulfillment center
Around 800,000 square feet in size, sortable fulfillment centers can employ more than 1,500 full-time associates. In these buildings, Amazon employees pick, pack, and ship customer orders such as books, toys, and housewares. Thanks to the innovations of Amazon Robotics, associates often work alongside robots, allowing them to learn new skills and helping create a more efficient process to meet customer demand.
Non-sortable fulfillment center
Ranging in size from 600,000 to 1 million square feet, non-sortable fulfillment centers employ more than 1,000 full-time associates. In these centers, associates pick, pack, and ship bulky or larger-sized customer items such as patio furniture, outdoor equipment, or rugs.
Sortation centers
At sortation centers, associates sort customer orders by final destination and consolidate them onto trucks for faster delivery. Amazon’s sort center network provides full- and part-time career opportunities and is powering our ability to provide customers with everyday delivery, including Sunday delivery, which customers love.
Receive centers
Amazon’s receive centers support customer fulfillment by taking in large orders of the types of inventory that we expect to quickly sell and allocating it to fulfillment centers within the network. Full- and part-time roles are available in these buildings, which are about 600,000 square feet in size.
Specialty
Amazon’s fulfillment network is also supported by additional types of buildings that handle specific categories of items or are pressed into service at peak times of the year such as the holiday season. Many of these buildings feature part-time opportunities with the option to convert to full-time.
Delivery stations
In these buildings, customer orders are prepared for last-mile delivery to customers. Amazon delivery providers enable our fast, everyday shipping.
