Stop expansion! Amazon has shelved the construction of 13 distribution centers in 2022

According to foreign media reports , since 2022 , Amazon has postponed or canceled the opening of at least 13 distribution centers, and many of its warehouses across the United States have been affected, including warehouses in Texas, Florida, Louisiana, Tennessee and California.

According to the report , in order to cope with the increase in online consumer demand caused by the epidemic , Amazon has continued to expand its market size in the past two years, and its development pace has continued to accelerate. Its logistics and warehousing capacity has almost doubled in two years . However, with the negative market, Amazon had to suspend its expansion .

(Amazon warehouse change report)

Amazon Chief Financial Officer Brian Olsavsky said when announcing the first quarter 2022 financial report that the company did not take into account possible fluctuations in the demand outlook when building more delivery infrastructure , resulting in an increase of US$6 billion in operating costs in the first quarter.

It is understood that due to the decline of the online consumption boom, many e-commerce companies, including Amazon, are facing the problem of overcapacity . To solve this crisis , many companies have started layoffs. In addition, Amazon has slowed down its warehouse expansion plans, but since many plans were made 18 to 24 months ago, the content that can be adjusted is limited.

According to Brian Olsavsky, Amazon generally accelerates the construction of distribution centers so that they can be put into use as soon as possible , because dense warehousing helps the company reduce transportation costs. However, in order to avoid increased labor expenses, several large facilities originally planned to be put into use by Amazon in the second half of 2022 will be postponed for at least one year. Because excess labor leads to reduced productivity, which in turn leads to increased costs, this cost accounts for about one-third of the new costs in the first quarter.

As of now, Amazon has nearly 1,200 distribution facilities in the United States , with a total area of ​​nearly 376 million square feet ( about 35 square kilometers ), and is still the retailer with the largest distribution network in the U.S. Its competitors, such as Walmart , have 197 distribution facilities with a total area of ​​about 145 million square feet ( about 14 square kilometers ); Target has 52 distribution facilities with a total area of ​​about 58 million square feet ( about 5.4 square kilometers ).

In addition, Amazon US recently announced that it has updated the new return address settings for self-delivery sellers. Sellers can choose to specify the return address you want to use when the buyer sends the return. In addition to setting the default return address and the return address closest to the buyer, self-delivery sellers can now send returns to: the order shipping address.

The economic downturn, the epidemic situation, and the cooling of online consumption have not only made sellers face a cold winter, but major e-commerce platforms are also taking various self-protection measures. Previously, Shopee withdrew from the Spanish market, eBay closed its Turkish site, and now Amazon has shelved its expansion plan . Although cross-border e-commerce has encountered a cold wave, it is still fertile ground for development, judging from future trends.

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