NY – Amazon delivered packages to its Prime customers at the fastest speed ever recorded in 2023, the retailer said Tuesday, thanks to better inventory location, a new regionalization model for shipping and more same-day warehouses.
The company had indicated in public announcements and corporate earnings calls last year that packages arrived faster at the doors of Prime members, who pay $139 a year – or $14.99 a month – for fast delivery and other benefits.
In a blog post On Tuesday, Doug Herrington, CEO of Amazon’s global stores business, provided more details on package shipments during the holiday shopping season, which saw strong consumer spending despite price increases. and high borrowing costs.
In the last three months of 2023, Herrington said Amazon increased the number of items it delivered the same day (or next day) in the US by more than 65% year over year. More than 70% of Prime orders arrived the same or next day across the Atlantic in the UK.
Overall, Amazon said it delivered 7 billion items with same-day or next-day shipping last year. The company declined to provide comparable figures for shipping data from 2022.
The e-commerce giant has attributed the faster deliveries to improvements in inventory management and the growth of its same-day delivery sites. The company currently has 55 such sites in U.S. metropolitan areas and plans to add more in the coming years.
Faster shipping is also being driven by a new operations network, which divides the country into smaller regions and ships items from those areas. The new model, which follows a pandemic boom in the company’s logistics footprint and subsequent cutbacks, also helps Amazon reduce costs as packages travel a shorter distance and have fewer touchpoints.
Sarah Mathew, Amazon’s vice president of delivery experience, said in an interview that the online retailer continually analyzes its regions — including the buildings and inventories within them — and plans to refine them to better serve customers.
But despite Amazon’s focus on speed, some rural Prime customers have complained about slower delivery speeds.
The company relies on independent contractors and carriers like UPS to ship orders to customers. It has also been recruiting small businesses that can help it make direct deliveries to hard-to-reach rural areas.
When asked about rural deliveries, Mathew said the company is paying attention to anecdotal customer experiences, but doesn’t see an “overall trend” that shows a slowdown.
Amazon’s focus on speed has put it in the crosshairs of labor advocates, who argue that the company’s fast warehouses lead to more injuries among warehouse workers. The company’s latest data for 2022 shows that the rate of injuries or illnesses among Amazon’s U.S. workforce fell that year. But it was still higher than in 2020.
Last year, Amazon began testing a robotic warehousing system called Sequoia, which places inventory into bins and presents it to employees so they don’t have to bend and reach as much. The company claims that the robot also reduces the time needed to process an order by 25%.
Amazon plans to roll out Sequoia to more warehouses this year. He declined to say how many facilities will benefit from it.
Other retailers, including Walmart and Target, have also been working on faster shipping for online orders.