Amazon is Now Going Vertical to Ship Millions of Little Things
The Amazon distribution center under construction in Clay will be one of the largest warehouses in the world when it opens in the fall of 2021.
Clay, N.Y. – When plans emerged in 2019 for a mammoth distribution center in Clay, it was revolutionary: a unique 3.8-million-square-foot, five-story structure to handle the booming sales of Amazon.
Over time, Amazon has announced plans for nearly identical buildings in at least 11 other towns across America: Pflugerville, Texas; Detroit; Mount Juliet, Tennessee; and others. New ones are made public almost every month. In just the past few days, Amazon disclosed plans to build similar buildings in Shreveport, Louisiana, and Savannah, Georgia.
The Clay project is no longer unique, but it will be on the leading edge of a multibillion-dollar drive by Amazon to get merchandise to customers’ doorsteps quickly and cheaply.
Business is soaring for the e-tailer. Sales jumped 38% to $386 billion last year and profits rose 84% to $21.3 billion as the coronavirus drove more people to shop online. And they’re not slowing down. In the first quarter of this year, Amazon’s profits tripled to $8.1 billion.
The e-commerce giant is building a bigger distribution network to handle all that business. It disclosed in February that it expanded the square footage of its fulfillment and logistics network by 50% in 2020. It had 402 million square feet of space in its network at the end of the year.
The world has never seen such explosive growth in one company’s distribution network.
Dave Fildes, director of investor relations, said Amazon will continue to add buildings, with a focus on expanding one-day and same-day delivery for Amazon Prime members and giving the company “much more certainty on being able to get items from point A to point B.”
Some 500 workers are building the Clay facility, which is expected to open this fall. One near Colorado Springs Airport is scheduled to beat it and open this summer. But as this chapter in the history of supply-chain innovation is written, the Clay center will be near the forefront.
Known as an Amazon Robotics site, the $350 million building is Amazon’s latest generation of fulfillment centers for the distribution of small, sortable merchandise.
MWPVL International, a supply chain, logistics and distribution consulting firm, estimates Amazon will ship 85 million products a year from the center. That’s an average of nearly 235,000 a day.
Everything that goes in and out of the center will be no bigger than 18 inches, so they’ll fit on the plant’s sophisticated conveyor system and in its mobile shelving units. No snowblowers, couches, garden trimmers or 24-packs of toilet paper. Those will come from other warehouses.
The Clay facility will use robots and 1,000 workers to pick and sort items such as books, electronics, school and art supplies, small household goods, clothing and toys – just about any small item you can buy on Amazon.com. (No groceries. They’re shipped from facilities equipped with refrigeration.)
‘Kind of a phenomenal experience’
The center will operate 24 hours a day, seven days a week, with tractor-trailers dropping off and loading merchandise at nearly 100 loading docks in the rear of the building.
The structure is among the first of a new design that allows the e-commerce king to pack tons of products into a relatively small footprint.
The building’s foundation is 820,000 square feet, which is big by any measure. But unlike most other Amazon distribution centers, which are single-story structures, this one will have a mezzanine level and four floors above the ground floor.
Onondaga County Executive Ryan McMahon, on right wearing yellow vest, tours the Amazon fulfillment center under construction in Clay on Friday, May 7, 2021.
At 3.8 million square feet, the center will be the second-largest warehouse in the world, smaller only than a 4.3-million-square foot Boeing factory warehouse in Everett, Washington.
It will have more than 1.5 times the retail space of Syracuse’s Destiny USA, one of the biggest malls in the country.
“It’s massive,” said Onondaga County Executive Ryan McMahon, who toured the center last Friday. “It’s tough to comprehend. You look from one end to the other end of the building, it’s just kind of a phenomenal experience. And the type of activity that will be going on every day will be really impressive.”
Going vertical
Multistory warehouses have been a common design in Asia and Europe for years, but they are a recent trend in the United States, said Spencer Levy, senior economic adviser for commercial real estate firm CBRE.
“The United States has a lot more land than Europe or Asia,” Levy said. “We’re much less densely populated, so it was always cheaper and easier to build single-story than it was to build multistory.”
With more distribution centers being built closer to urban areas, multistory warehouses allow the owner to maximize the amount of goods that can be stored in them without expanding the structure’s footprint, he said. And the added space can offset the extra costs associated with building multiple floors, he said.
Onondaga County and town officials welcomed Amazon’s development on the former Liverpool Public Golf and Country Club on Morgan Road in Clay, citing the jobs the facility will bring to the area.
In Newport, Delaware, Amazon plans to open a distribution center at the site of the former General Motors Wilmington assembly plant, which closed in 2009 and was torn down in 2019.
“Amazon already employs more than 2,500 Delawareans, and we welcome additional investment that will result in more jobs for Delaware families — especially at vacant industrial sites that are ideal for redevelopment,” Delaware Gov. John Carney said.
Location of new Amazon US facilities.
Years of efforts by the city of Detroit to redevelop the old Michigan State Fairgrounds met with failure until Amazon announced plans to build a 3.8-million-square-foot distribution center there in August. The building is expected to open in 2022.
“This was the single largest development property left in the city of Detroit and what Detroiters need are jobs,” Mayor Mike Duggan said. “We need good-paying jobs and jobs of the future.”
Mississippi officials were thrilled when Amazon announced plans in November to open a similar fulfillment center at the publicly owned Madison County Mega Site, a planned industrial park, near Jackson.
“We are well-positioned to be a leader in logistics, and I want to thank the leadership in Madison County and at Amazon for bringing more than 1,000 jobs to the area,” Mississippi Gov. Tate Reeves said.
Artificial-intelligence-powered robots
Conveyors will corkscrew through the building, eliminating the need for workers to sprint from floor to floor.
The center will employ 1,000 people, but it will also make extensive use of robots.
When a customer places an order online, a robot that resembles a Roomba vacuum will pick up a plastic pallet with storage shelves containing the product, then bring the pallet to an employee known as a picker.
“We will have hundreds of AI-powered robotics drive units that we use to move around shelves of product and deliver them to employees who are working at ergonomic work stations,” Amazon said in an email. “These drive units weigh more than 300 pounds and can lift up to 1,500 pounds of our inventory pods.”
By having robots come to workers, rather than the other way around, products can be processed much faster, said Marc Wulfraat, president of MWPVL International.
“The shelf travels to them,” he said. “They don’t travel to the shelf. It more than doubles the speed of picking items. Were you to do this manually and walk around with a shopping cart, maybe you could pick 100 items an hour, whereas in this environment, you could probably get upwards of 350.”
Amazon’s warehouse inventory software will tell the picker where on the pallet the ordered product is, and the employee will then pull them off the pallet and place the merchandise in a tote. The tote is then placed on a conveyor, which carries it downstairs to a packing station, where a worker places it in a shipping package.
From there, the product goes back on the conveyor to a final station, where it is scanned and a shipping label placed on it. Then it is put on a truck for shipment to a sortation center or a delivery center.
Wulfraat said the new design makes for an extremely efficient operation. He estimates the center will be able to handle 350,000 items a day during peak periods.
“The automation enables them to be highly efficient. Anytime you remove the travel that a person has to do in a warehouse, the productivity can easily double.”
