Source: Rodrigue, J-P (2020) “The Distribution Network of Amazon: Analyzing the Footprint of Freight Digitalization”, Journal of Transport Geography, Vol. 88.
The locational behavior of Amazon’s e-fulfillment centers (EFC) shows a strong market orientation and relatively uniform distribution of facility sizes with a median footprint of 855,000 square feet. This implies that Amazon is using a facility size that it considers being optimal and that growth is accommodated by leasing new facilities of similar size. This is a common practice in the expansion of “big-box” retailers that elect for a standard store size, such as Walmart. The latter has a network of more than 3,280 SuperCenters in the United States of an average footprint of 180,000 square feet. Still, there are variations in the footprint of EDCs reflecting the specialization of their functions with the great majority of the footprint in the 600,000 to 1M square foot range.
The space requirement of EFCs usually implies their location in a suburban (exurban) setting, near a major highway, and a parcel hub, since orders are shipped through parcel services. Similar to IXDs, EFCs have a weighted median location in close proximity to the demographic center of the United States, underlining Amazon’s strategy towards optimal market accessibility. The most common co-location concerns delivery stations as when an EFC is in proximity to a high demand area, there is an opportunity to use a part of the facility as a delivery station.
To accommodate the high throughput generated by online orders, a new generation of automated EFCs have developed random storage operations for sortable items. This matches the stochastic nature of online orders, and the large variety of goods carried. Sortable goods are stored randomly on automated racks with each location recorded, which reduces the average retrieval time since the inventory is at several locations in the distribution center. As online orders usually involve single items that are shipped as individual parcels, random storage matches more closely the volume and frequency of e-commerce orders. This storage strategy, which was developed for the purpose of e-commerce, reduces the warehousing footprint since inventory is stored in unallocated space. The storage capacity has a higher utilization level than if storage space was allocated by item category. Heavier and non-sortable items are stored in separate allocated spaces.