Amazon cancels, delays dozens of warehouses because it seems to be to rightsize capability

Dive Temporary:

  • Amazon’s efforts to tug again the enlargement of its achievement community have affected 66 lively or deliberate U.S. services, in accordance with MWPVL Worldwide, a consulting agency that tracks the e-commerce large’s logistics footprint.
  • The corporate’s cancellations, closures, delays or pauses impression 24.6 million sq. ft of ground-level house for achievement facilities, supply stations and different sorts of buildings throughout 28 states, MWPVL President and founder Marc Wulfraat mentioned in a Sept. 6 e mail.
  • Amazon nonetheless has 271 services with almost 100 million whole sq. ft in its pipeline, per MWPVL knowledge. The corporate “continues to be opening up an astonishing quantity of house this yr — it’s simply that they are going to open much less house [than] initially deliberate,” Wulfraat mentioned.

Amazon warehouse closures, delays ripple all through U.S.

Amenities which were canceled, closed, delayed or positioned on maintain as of Sept. 6, per MWPVL Worldwide

Dive Perception:

MWPVL’s knowledge reveals the extent of Amazon’s efforts to reduce its warehouse presence as on-line gross sales decline from 2021’s pandemic-fueled highs.

Extra capability and fewer productive services previously a number of months have resulted in billions of {dollars} in added prices for the corporate. In response, Amazon is slowing down its community enlargement by 2023 “to raised align with anticipated buyer demand,” CFO Brian Olsavsky mentioned on a July earnings name.

Amazon’s actions do not goal a selected facility kind or geographic space. Nonetheless, the vast majority of the strikes are closures and plan cancellations — totaling 42 U.S. services — moderately than delays. 4 deliberate services in Spain and one facility in Germany have additionally been canceled.

Amazon is nixing these tasks to cut back each capital expenditures and operational prices, Wulfraat mentioned. Amenities which can be closing are having their operations consolidated into one other close by warehouse or being put up for sublease.

Amazon spokesperson Maria Boschetti mentioned in an e mail that the corporate weighs quite a lot of elements in deciding the place to develop its future websites.

“Now we have dozens of achievement facilities, sortation facilities and supply stations below building and evolving around the globe,” Boschetti mentioned. “It’s widespread for us to discover a number of areas concurrently and modify timetables primarily based on wants throughout the community.”

Amazon can be delaying the opening of 24 services slated to open later this yr, per MWPVL. Some have had their openings pushed again to so far as 2024. Wulfraat mentioned the corporate “can pay the lease expense however keep away from ramping up further payroll.”

Editor’s word: This story was first printed in our Logistics Weekly e-newsletter. Join right here.

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