Amazon will permanently close several warehouses!

At present, cross-border e-commerce companies have begun their Spring Festival holiday mode one after another. The goods to be prepared before the festival have been handed over to freight forwarders, and some have already started to travel across the ocean, or are still waiting at the dock. However, Amazon suddenly announced that all warehouses in a province in North America will be permanently closed.

All Amazon warehouses in one province closed

Recently, Amazon suddenly announced that it will close all of its warehouses ( 7) in Quebec, Canada within the next two months .

After this adjustment, Amazon's online orders at the Quebec site will no longer be delivered by the platform's own infrastructure , but will be transferred to hosted third-party service providers , such as some local delivery companies in Canada.

An Amazon spokesperson said that after a business review, Amazon decided to resume the third-party delivery model supported by local small businesses, which is similar to how it operated before 2020 and is expected to continue to provide high-quality service.

At the same time, Amazon also stated that this decision was not made rashly, but was part of its strategic adjustment and would not affect the operations of warehouses in other regions .

The warehouse employees were shocked by the decision to shut down everything. " We had heard about some problems, but we didn't expect to shut down the entire operation network. "

From a more realistic point of view, the closure must be related to profitability. In recent years, due to the downward trend of the global economy and the decline in corporate profitability, Amazon has terminated multiple logistics facility construction plans since 2021.

There are also widespread layoffs. Previously, Amazon expanded on a large scale , hiring more than 450,000 people in the United States alone . However, as cost pressures intensified , about 27,000 employees were fired in two rounds of large-scale layoffs in 2023 alone . Layoffs are still ongoing this year. After the closure of the above-mentioned warehouses, 1,700 Amazon regular employees and 250 temporary employees will face unemployment.

In recent years, competition in the global e-commerce market has intensified, and various platforms have continuously improved their delivery capabilities to gain more market share. Amazon must also maximize its resources to maintain its market leadership by closing underperforming warehouses and focusing its energy on improving customer satisfaction and operational efficiency.

There is no solution to the continuous liquidation

Around this time last year, sellers began to receive notices that several Amazon warehouses in the United States were permanently closed.

At the end of February 2024, Amazon announced the permanent closure of four popular warehouses, and sellers’ WeChat Moments were subsequently flooded with relevant notifications from freight forwarders.

“ Important Notice!!! The four warehouses MEM1, MQJ1, QXY8, and HMW4 have been officially confirmed by Amazon to be permanently closed . Sellers are advised to pay close attention to Amazon’s official notifications and adjust delivery plans and inventory management strategies in a timely manner to avoid potential operational interruptions and economic losses! ”

At that time, a group of sellers who had already made appointments with relevant warehouses were in a state of panic. "My goods are all in the cabinets! It's crazy to do this now. Can I wait all over again? I'm worried that I won't be able to get them on the shelves in time!"

Freight forwarders informed sellers: If customers have created labels but have not yet shipped the goods, please contact Amazon immediately to re-create the labels; for goods that are already on the way but have not yet been delivered, please re-create the labels and contact the freight forwarding company to change the warehouse.

But at the same time, some sellers mentioned that they had not received relevant notifications and were worried about whether the goods in the corresponding warehouses would be affected, how Amazon would handle them, and which warehouses they would be transferred to.

Even before the permanent closure notice, freight forwarders said that warehouses such as MEM1, MQJ1, QXY8, and HMW4 would suspend the reservation and receipt of FBA goods , thinking it was just a warehouse overflow problem and never expected it to be closed directly .

Earlier, the global e-commerce market continued to heat up, and Amazon continued to invest heavily in building Amazon's warehousing and logistics infrastructure. However, as the requirements for cost reduction and efficiency improvement for corporate operations became more and more urgent, Amazon began to slow down its infrastructure construction and closed some warehouses. As of now, Amazon has more than 175 warehouses in various places, but the problem of warehouse explosion remains unsolved.

Since January, various parts of the United States have been hit by natural disasters such as blizzards and fires, causing a shutdown.

In the western United States, the California wildfires have not been extinguished. LGB8, one of the three most popular warehouses in the western United States, was closed urgently due to power outages caused by the fire . The rejection rates of warehouses such as DUR1, DLX5, MIT2, IUSP, TEB9, and MQJ1 increased .

A snowstorm hit Texas this week, after which Louisiana, Georgia, Alabama, Florida and Mississippi declared a state of emergency, and a number of Amazon warehouses are expected to be affected.

In the eastern United States, warehouses such as MDW2, IND9, DFW6, and XLX1 were temporarily closed or frequently postponed due to the snowstorm.

At present, Amazon's US warehouses such as SNA4, FTW1, MDW2, MEM1, MQJ1 , RFD2 , CLT2, O RF2, RMN3, SWF2, RYY2, and Amazon's Canadian warehouses such as YEG1, YEG2, YVR3, YYC4, YYC6, YOO1, YHM1, and YYZ3 are still overwhelmed .

Peak shipping season, crowded docks

The large-scale warehouse explosion has caused certain resistance to the shipment and delivery of a number of sellers, but fortunately, consumer enthusiasm on Amazon has cooled down in recent times. Compared with the last-mile out-of-stock problems, sellers may be more worried about the first-mile problems of preparing goods before the holidays.

Recently, major domestic ports have welcomed a peak in shipments, and terminal yards in Shenzhen, Guangzhou and other places have issued emergency notices one after another saying that the terminals are close to saturation .

From the videos in the freight forwarder’s circle of friends, we can see that container trucks are queuing up to enter the Shenzhen Yantian Port, Guangzhou Nansha Port and other ports , with the traffic flow entering the port being several kilometers long .

Similarly, the port operation pressure in Ningbo Port Area has also increased dramatically. The terminal stockpiling volume of its Beiyi Jisi and Meishan Terminal has reached 95% , and the pre-entry green channel has been temporarily suspended because the terminal is in a saturated state.

Zhouxin container yard announced that the container volume will surge as the year-end approaches, container space is tight, and the container yard, equipment, and port entry fees have doubled. From 18:00 on January 19, the temporary storage and port entry fees will be adjusted to 1,500 yuan per container. Some container yards are charging close to 2,000 yuan per container, an increase of more than 600%.

To cope with congestion and improve efficiency , Shenzhen Yantian Port ( YICT) and Shekou Port (including SCT, CCT/MCT and other container terminals) have adopted an appointment and number system to manage incoming vehicles .

It is reported that the daily appointment number limit for SCT is 5,000, for CCT and MCT it is 3,000 each, and for YICT it is 13,000 ( increased to 15,000 from January 20 to 28 ) , but there is still a situation where "it is difficult to get a number".

Yantian Port has also continuously increased its efforts to clear containers from the port, and has cleared nearly 60,000 empty TEUs since December .

Guangzhou Nansha Port has also begun to implement the foreign trade container opening time limit policy : starting from 19:00 on January 20 , based on the berth plan reception information, export heavy cabinets will be accepted within 5 days before the ship's expected berthing date (ETB-5 days).

Overseas, the Linerlytica report also pointed out that several important ports in Northern Europe and the Mediterranean are experiencing severe congestion, with yard occupancy rates remaining high, and large-scale delays are expected .

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