Amazon closes 66 warehouses, affecting the entire United States

According to foreign media reports, Amazon is adjusting its delivery strategy, suspending warehouse expansion across the United States, consolidating business in some regions, and scaling back growth plans in secondary markets.

According to data from consulting firm MWPVL International, Amazon has canceled or closed 66 warehouses in the United States this year, which will inevitably have varying degrees of impact on sellers' logistics. The impact includes 24.6 million square feet of ground space in fulfillment centers, distribution stations and other types of buildings in 28 states in the United States, which can be said to have affected the entire United States.

The reason for Amazon's large-scale warehouse closures is obvious. With the outbreak of the COVID-19 pandemic around the world in 2019, consumer demand for online shopping has surged. In order to cope with the pressure of logistics, Amazon has expanded its warehouses on a large scale. It is reported that Amazon doubled the size of its fulfillment network built in 25 years within 24 months during the pandemic. According to MWPVL data, Amazon's warehouse area has grown from 165 million square feet before the pandemic to 379 million square feet in May 2022.

But as online sales fell from their highs in 2021, Amazon faced overcapacity and reduced production facilities, which increased costs by billions and caused losses in the first and second quarters of this year. In order to control costs and reduce losses, Amazon began to cancel or close some warehouses. Amazon said that the facilities that are about to be closed will consolidate their operations into another nearby warehouse or sublease.

It is reported that Amazon's actions are not targeted at specific warehouse types or geographic areas, and most of the measures are closures and cancellations rather than postponements. In addition to the US region, Amazon's four planned warehouses in Spain and one warehouse in Germany have also been canceled.

Even so, according to MWPVL data, Amazon currently operates 1,254 logistics warehouse facilities of all sizes in the United States and 2,297 worldwide. There are still 271 warehouses planned to be expanded in the United States, with a total area of ​​nearly 100 million square feet, and 75 warehouses planned to be expanded in other regions. Although Amazon has been canceling or closing warehouses on a large scale this year, it is still planning to open a large number of warehouse spaces, but the spaces that will be opened are less than originally planned.

To reduce operating costs, Amazon has also delayed the opening of 24 facilities that were scheduled to open later this year, and some job vacancies have been postponed until 2024 to avoid adding additional labor wages, MWPVL data showed.

In addition to the logistical impact of warehouse closures, sellers also need to note that Amazon has confirmed that all delivery services to customers will be suspended on September 19, the day of the Queen’s funeral.

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