As Online Shopping Surged, Amazon Planned Its New York Takeover
When the pandemic gripped New York City, it propelled an enormous surge in online shopping that has not waned, even in a metropolis where stores are rarely far away. People who regularly bought online are now buying more, while those who started ordering to avoid exposure to the virus have been won over by the advantages.
The abrupt shift in shopping patterns has made New York a high-stakes testing ground for urban deliveries, with its sheer density both a draw and a logistical nightmare.
It has also highlighted the need for an unglamorous yet critical piece of the e-commerce infrastructure: warehouse space to store and sort packages and satisfy customer expectations for faster and faster delivery.
Amazon has spent the pandemic embarking on a warehouse shopping spree in New York, significantly expanding its footprint in the biggest and most lucrative market in the country.
It has snatched up at least nine new warehouses in the city, including a 1 million-plus square foot behemoth rising in Queens that will be its largest in New York, and today has at least 12 warehouses in the five boroughs. And it has added to its roster more than two dozen warehouses in suburbs surrounding the city.
No other large competitor has a single warehouse in the city and Amazon has largely left most of its chief rivals, like Walmart and Target, behind.
“Amazon had people making deals,” said Adam Gordon, whose real estate firm Wildflower owns several warehouses in the city. “And they were outcompeting.”
An Amazon warehouse in Hunts Point in the Bronx. The giant retailer is creating a warehouse empire in the region, with at least 12 warehouses in New York City and more than two dozen in the suburbs. Credit...Andrew Seng for The New York Times
While New York’s narrow streets, chronic traffic jams and brutal lack of parking are all formidable challenges, the city also has a severe shortage of warehouses just when they are most needed to properly grease an efficient delivery system.
New York has about 128 million square feet of industrial space, far less than many smaller cities. Indianapolis, whose population is just one-tenth that of New York’s, has nearly double the space. Chicago is the nation’s leader with more than 1.2 billion square feet.
Many packages come to New York from New Jersey and Pennsylvania, where there is room to build bigger and cheaper warehouses. And in the past year Amazon has added 14 new warehouses in New Jersey and on Long Island, totaling more than 7 million square feet.
But having warehouses in the city is more cost effective and can trim roughly 20 percent off delivery expenses compared with deliveries that originate in New Jersey.
“We are excited to continue to invest in the state of New York by adding new delivery stations,” said Deborah Bass, an Amazon spokeswoman, adding that the company’s goal was to “become part of the fabric of New York City by embracing the people, the needs, and the spirit of the community.”
Amazon’s rapid expansion in New York has also drawn more scrutiny to the treatment of its workers, an issue that the company has faced in other parts of the country. Amazon has sought to quash efforts by warehouse employees to form unions — including on Staten Island — and a high-profile battle is currently being waged in Alabama.
In New York, the attorney general has sued Amazon over conditions at two of its local warehouses, accusing the company of failing to properly clean its buildings and conduct adequate contact-tracing, as well as of taking “swift retaliatory action” to silence employee complaints.
An Amazon spokeswoman disputed the allegations and said the company cared “deeply about the health and safety” of its workers.
Amazon’s growth in New York comes two years after it abandoned plans to build a gleaming new headquarters in Queens. A chorus of lawmakers and progressive activists had opposed granting one of the world’s wealthiest companies billions of dollars in government incentives that the giant retailer had won by making cities compete against each other.
But New York remains an alluring prize, and Amazon’s string of warehouses in the city puts it in a strong position to benefit from the huge spike in online shopping set off by the pandemic.
