Amazon, which has been closing, canceling or delaying the opening of its logistics facilities since April 2022—when it admitted that a voracious expansion in 2021, topping out at more than 400M SF, had grossly overestimated the rate of e-commerce growth—will continue to chop branches off its logistics network in 2023.
A new survey by MWPVL International, a logistics consultant that tracks Amazon’s network, says the tally of shuttered or canceled portions of Amazon’s mammoth industrial footprint has now grown to 99 facilities encompassing more than 32M SF in 30 states.
This total grew by nearly 25% in the fourth quarter, up from MWPVL’s count at the end of September of 66 facilities covering nearly 25M. MWPVL, which issued a detailed map specifying where each of the canceled, closed or delayed facilities are located, said the closures are ongoing.
The lion’s share of the closed facilities is located along the Boston—Washington DC corridor and in California, Florida and the Chicago metro. Fulfillment centers and last-mile delivery stations are the facility types most impacted by the closures, according to MWPVL.
Amazon disputed the new total in a statement this week which accused MWPVL of “[saying] we’re selling or abandoning land or buildings that we’re keeping, or buildings that we never had in our possession to begin with”—without specifying which of the facilities on the consultant’s map are incorrect.
According to MWPVL data, despite its across-the-board effort to trim warehouse space, Amazon still has an estimated 231 facilities encompassing 82M SF in the planning stages, most of which were earmarked for an expansion of its last-mile delivery reach that was planned before the cost-cutting began in Q2 2022.
While delaying the opening fulfillment centers, including newly built multi-story mega-warehouses—which will stand empty for up to two years—Amazon has yet to establish a strategy for final-mile delivery stations that are nearing completion, MWPVL said. According to the report, the company is alternating between opening delivery stations in new markets or immediately listing new delivery facilities for sublease in established markets.
Regarding land—Amazon acquired more than 4,100 acres of it during the pandemic—the company initially said last year it wasn’t giving up on any of the locations where it was shutting down development in the near term.
However, in H2 2022, Amazon executed a strategic shift of capital expenditure resources from its e-retail network to an expansion of data-processing infrastructure for its top-priority growth sector—Amazon Web Services, the global cloud computing leader.
In January, Amazon began selling off some of the land and property it acquired for new warehouse development during its non-stop acquisitions binge in 2021.
Dermody Properties purchased a four-building office campus in Milpitas from Amazon—and will convert the 29-acre Bay Area site into something that once was part of Amazon’s original plans for the property: a 490K SF warehouse.
The e-commerce giant bought the vacant 395K SF Metro Corporate Center for $123M in October 2021 after the land was entitled by Milpitas for industrial use, according to a report in the San Francisco Business Times. At the time, Amazon was still scooping up real estate near big cities that could be used for new warehouses.