Amazon Packages Are Arriving Faster

The speedier delivery times are thanks to an overhaul of the company’s logistics network.

May 15, 2023

ALEXANDRIA, Va.—Amazon is getting customers their packages earlier after an overhaul of the company’s logistics network, reports The Wall Street Journal. The company also has updated its inventory management and changed the search results customers see on its website, and these changes seem to be helping the company’s profitability.

“When we offer faster speeds, customers are more likely to buy something,” Udit Madan, Amazon’s vice president of transportation, told the Journal. “They come back more often to shop with us.”

The overhaul included a change from operating shipping on a national model to a regional one. Instead of transporting items cross-country, Amazon now has eight regions that are designed to work self-sufficiently.

The new setup means that Amazon doesn’t move items outside of each region unless it has to, Madan said. Items commonly bought are now increasingly placed throughout the country to be closer to customers, he told the Journal. Customers now may see items that are closer to them appear higher in their search results. Now, 76% of customer orders are from facilities located in their region, compared to 62% a year ago.

“This isn’t something we could have easily done in 2019 because we had a much more sparse network,” Madan told the Journal. “The doubling of footprint really allowed us to have a lot more facilities that were closer placed to customers.”

According to Madan, the overhaul has allowed Amazon to see a 15% reduction in the distance items travel from fulfillment centers to customers and a more than 12% decrease in “touches,” or how often a package is handled. Also, shipping cost increases for the company are slowing. They increased 2% in the first quarter of 2023, down from 14% year over year.

Amazon is also increasing delivery speed by expanding its network of same-day centers. According to MWPVL International, the number of facilities could reach 150 in the next several years. The facilities focus on stocking higher demand items for quick delivery, such as toiletries and electronics. Madan told the Journal that customer use of same-day delivery increased by 50% year over year during the first quarter to nearly 26 million customers.

The Journal reports that Amazon is also streamlining its business through a significant cost-cutting strategy, which includes evaluating its Alexa business and other unprofitable divisions. The company also let go of 27,000 employees in recent months and discontinued several projects.

Amazon Chief Financial Officer Brian Olsavsky in a late April earnings call with investors said that the company has been able to stabilize its operations, and that it has better balanced warehouse capacity and demand for products.