UPDATE: Sept. 20, 2018: An Amazon spokesperson told Supply Chain Dive Amazon has not signed leases in the four locations rumored in multiple news reports. Multi-story warehouses are not a new concept for the the e-commerce giant, and it has been building warehouses with several levels for years, according to the spokesperson. Amazon is focusing on a smaller footprint and leasing real estate space closer to dense metro areas.
Dive Brief:
- Amazon is reportedly building multi-story fulfillment centers across the U.S., according to several news reports. The e-commerce giant did not respond to Supply Chain Dive's request for comment by press time.
- Bisnow reports Amazon is planning four-story, 2.5 million-square-foot warehouses in Minnesota, California, Wisconsin and North Carolina.
- The e-commerce giant recently announced plans to open a second fulfillment center in Stockton, California, located about 70 miles east of San Francisco.
Dive Insight:
Available warehouse space is dropping as retailers seek more capacity to quickly fulfill high volumes of e-commerce orders.
With consumers expecting short timelines from order to delivery, many businesses are concentrating their warehouses and fulfillment centers closer to densely populated areas, allowing shorter transit time to reach consumers. The problem is, urban and suburban areas often have limited real estate available, and the space that is available tends to be pricier.
This conundrum has driven many retailers to get creative with fulfillment, some converting their brick-and-mortar stores into e-commerce fulfillment centers.
Another solution to the lack of space: build vertically, not horizontally.
This is the idea Amazon is reportedly executing with its four-story warehouses. Each of the reported locations is close to a dense urban area, allowing the e-commerce giant to execute same-day and next-day deliveries but also coping with the problem of limited real estate.
In the future, you might be looking up even higher to see Amazon's fulfillment centers. The e-commerce giant was granted a patent earlier this year for an airborne fulfillment center.
