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Amazon Needs to Invest Billions In Warehouse System To Keep Up With Demand: Reuters

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Amazon Needs to Invest Billions In Warehouse System To Keep Up With Demand: Reuters

What happened: A new report indicates Amazon.com Inc. (NASDAQ: AMZN) needs to invest billions of dollars into the expansion of its warehouse and delivery system to keep up with consumer demand. Reuters reports the online retailer is running out of space and available labor.

Amazon has almost doubled its network of warehouses in an 18 month period, although more investments are being planned.

Why it’s important: Amazon is “running out of labor,” according to Andrea Leigh, vice president at e-commerce optimization firm Ideoclick, who formerly worked at the company. A job posting for employees for an Amazon warehouse in Montgomery NY, 60 miles northwest of New York City, was offering a $3,000 bonus for recruits to begin working before July 1.

The company currently employs 1,335,00 full and part-time workers.

What’s next: Amazon is set to add 517 facilities to its global distribution network in the years ahead, that’s 176 million additional square feet being added to 402 million square feet the company currently utilizes, according to logistics consultancy MWPVL International.

Over the past 12 months Amazon has increased capital expenditures and equipment leases by 74% to $54.5 billion.

 

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