The Wall Street Journal reports that Amazon has revamped its extensive logistics network in an effort to reduce the distance deliveries must travel within the United States in order to increase profitability.
Amazon executives, analysts, and Amazon.com merchants claim that the company’s overhaul has reduced shipping times, changed the way it handles inventory, and improved the search results users see on Amazon’s site.
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Amazon has been expanding rapidly, tripling the size of its US warehouse in the past two years, thanks to increased demand during the pandemic and a rise in online shopping. Amazon is apparently no exception to the post-epidemic trend of many sectors shrinking to manage to spend, and we have already seen a marked reduction in the growth rate of several companies.
As part of its national business strategy, Amazon has historically shipped the items its customers want throughout the United States. In order to achieve the independent functioning of each zone, Amazon defined eight regions last year.
According to Udit Madan, Amazon’s vice president of shipping, the agreement prevents Amazon from transporting items between regions unless absolutely necessary. Customers are more likely to buy online and come back to us more often if we offer better speeds.
As a result of this shift, Amazon’s products now travel 15% shorter from the fulfillment center to the customer’s hands, which has also significantly slowed the rate at which transportation costs are rising. When searching for products on Amazon.com, we observed specific changes in search results, with products in closer locations ranking higher due to faster delivery times.
Nearly 26 million consumers used Amazon’s same-day delivery service in the first quarter of this year, a 50% increase in usage over the same period last year. In recent months, Amazon’s cost-cutting policy has led to the cancellation of several projects and a cost-cutting policy that eliminated approximately 27,000 jobs.