Amazon Overhauls Delivery Network, Focuses On Faster Delivery And Profits

Amazon.com, Inc AMZN has overhauled its logistics and delivery mechanism to send products to customers more quickly. 

According to a report from The Wall Street Journal that was published on Saturday, Amazon has cut delivery times, reshaped its inventory management, and changed the search results customers see on its flagship e-commerce website. 

The company has made frequent moves to reduce delivery-related costs. The changes at Amazon represent one of the most significant shifts to Amazon’s system of shipping goods worldwide with a focus on improving profitability, the Wall Street Journal reported. 

“When we offer faster speeds, customers are more likely to buy something,” Udit Madan, Amazon’s vice president of transportation, told the publication. “They come back more often to shop with us.”

In just two years, Amazon has doubled its U.S. warehouse space. The company operates more than 1,000 facilities throughout the U.S., logistics consultant MWPVL International told The Wall Street Journal.

The e-commerce company has increased the speed of delivery by expanding warehouses it calls "same-day centers." Amazon has been opening such facilities throughout the country and could grow to at least 150 same-day centers in the next several years, MWPVL International estimated. 

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Amazon reported that about 76% of products customers order are now from facilities within their region, compared to the 62% a year ago. The Wall Street Journal noted that the company had seen a 15% reduction in the distance items travel from fulfillment centers to customers and a more than 12% decrease in “touches,” or how often a package is handled. 

“This isn’t something we could have easily done in 2019 because we had a much more sparse network,” Madan told the publication. “The doubling of footprint allowed us to have many more facilities closer to customers.”  

The pace at which Amazon’s global shipping costs are rising has started to slow, increasing by about 2% in the first quarter, compared with a 14% jump for the same period a year earlier, the outlet reported. 

Last week, Amazon said it offered U.S. customers $10 to pick up a purchase rather than have it shipped to a home address.

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