Amazon is again expanding its distribution reach

Amazon’s lull in new projects after its pandemic-era growth spurt appears to be over, according to a new report.

E-commerce giant, company “Wall Street” daily reports, plans to add a slew of new warehouse and distribution facilities to compete with both online and brick-and-mortar rivals. The JournalCiting data from supply chain consulting firm MWPVL, it indicated that the new projects will add approximately 16 million square feet to Amazon’s North American footprint of more than 400 million square feet at the end of 2023.

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During the Covid-19 pandemic, Amazon (AMZN) has roughly doubled the size of its logistics operations as it tries to keep up with surging demand from consumers who are staying home and ordering products online. After the pandemic restrictions were eased, the company slowed down its development for about two years.

Recently, however, new developments in the e-commerce market have prompted Amazon to change course. One is Walmart’s growing e-commerce ambitions driven by its massive number of physical stores; the second is the rise of low-cost online shopping, especially for two companies with roots in China: Shein and Temu.

Amazon’s new projects include larger fulfillment centers as well as smaller hubs — mostly in rural areas — that act as staging areas for final deliveries to customers. They are also part of the restructuring of the company’s existing nationwide distribution network into one divided into nine regions, which company officials say will help locate supply chains close to consumers.

“If we can place these products in facilities closest to customers,” Amazon Chief Operating Officer Udit Madan told the newspaper, “it allows us to offer both high speeds and lower service costs.”

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