According to the Wall Street Journal, Amazon.com has overhauled its vast logistics network, aiming to shorten the distance packages travel in the United States in hopes of improving profitability.
Amazon executives, analysts and Amazon platform sellers say the company’s reforms have shortened delivery times, changed inventory management models and adjusted the search results customers see on Amazon’s flagship e-commerce site.
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During the epidemic, the surge in online shopping led Amazon to expand rapidly and double its U.S. warehouse space in two years. In the post-epidemic era, industries are beginning to face contractions to rein in spending, and naturally, Amazon is no exception, and they have already seen a significant slowdown in growth in several businesses.
Amazon has traditionally operated its domestic distribution business on a national model, shipping products that customers need across the United States. Over the past year, Amazon has delineated eight regions with the goal of achieving independent operations in each.
Udit Madan, vice president of Amazon’s shipping division, said the arrangement means that Amazon does not deploy merchandise across regions unless it has to. “When we offer faster speeds, customers are more likely to choose to shop for things online, and they come back and shop with us more often.”
The transformation has reduced the distance Amazon merchandise travels from its operations centers to customers by 15%, which has led to a significant slowdown in the growth of shipping costs. it.com has noticed some changes when searching for items from Amazon.com, and some items located within a certain region may show up higher in the results because they can achieve faster delivery.
In the first quarter of this year, Amazon’s same-day delivery customer usage grew 50% year-over-year to nearly 26 million customers. In recent months, Amazon’s cost-cutting strategy has resulted in the loss of approximately 27,000 employees and the termination of several programs.
