Amazon Expands in N.Y.C. as Pandemic Sends Shoppers Online

When the epidemic gripped New York City, it led to a surge in online shopping, which did not diminish even in a metropolis where stores are few. Those who used to shop online regularly are now buying more, while those who started placing orders to avoid exposure to the virus won over the advantage.

A sudden change in shopping patterns has made New York a high-level testing ground for urban childbirth, with both its density and a nightmare.

It has also highlighted the need for an unstoppable yet critical piece of e-commerce infrastructure: warehouse space to store and sort packages, and to meet customer expectations for faster and faster delivery.

Amazon has spent the cashing in on a warehouse shopping spree in New York that has expanded its footprint in the nation’s largest and most lucrative market.

It has scrapped at least nine new warehouses in the city, including more than 1 million square feet of beef growing in Queens that would be its largest in New York, and today five boroughs have at least 12 warehouses. And it has added to its roster in more than two dozen warehouses in the surrounding suburbs of the city.

No other major competitor has a single warehouse in the city and Amazon has outpaced most of its major rivals such as Wal-Mart and Target.

Adam Gordon said “Amazon had people bargaining” “and they were outcompeting.”

While New York’s narrow streets, chronic traffic jams and the brutal lack of parking are all kinds of tough challenges, the city has a huge shortage of warehouses when they are most needed to properly design an efficient delivery system.

New York has about 128 million square feet of industrial space, which is lower than many smaller cities. Indianapolis, which has just one-tenth the population of New York, has about twice the location. Chicago is the nation’s leader of over 1.2 billion square feet.

Many packages from New Jersey and Pennsylvania arrive in New York, where there is space to build large and cheap 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 a warehouse in the city is more cost effective and Can trim about 20 percent Delivery expenses compared to deliveries originating in New Jersey.

“We are excited to continue investing in New York State,” said Amazon spokesman Deborah Bass. , Needs and a sense of community. “

Amazon’s rapid expansion in New York has also led to more scrutiny for the treatment of its workers, an issue the company has faced in other parts of the country. Amazon has sought to extinguish efforts by warehouse employees to form unions – including Staten Island – and a high-profile battle is underway in Alabama.

In New York, The The Attorney General has sued Amazon In its two local warehouse positions, accusing the company of failing to properly clean its buildings and conducting adequate contact-tracing, as well as taking “swift retaliation” to calm employee complaints As well.

A spokesperson for Amazon disputed the allegations, saying the company took a deep note of the health and safety of its workers.

Development of Amazon arrives in New York Two years later, it abandoned plans to build a spectacular new headquarters in Queens.. A group of lawmakers and progressive activists opposed billions of dollars of government stimulus to one of the world’s wealthiest companies, which the giant retailer won by competing against each other.

But New York remains a lucrative prize, and the string of Amazon’s warehouses in the city puts it in a strong position to benefit from a massive spike in online shopping set up by the epidemic.

Roughly 2.4 million packages are delivered to the city each day, nearly half a million more than before the epidemic, and city data shows that 80 percent of deliveries are to residential customers, compared to 40 before the outbreak Compared to the percentage.

The edge of e-commerce crosses all categories: daily grocery deliveries more than doubled, restaurants and prepared food deliveries increased by 12 percent and deliveries of household goods, according to an analysis by Jose Holguen-Verus and Cara Wang Has increased by 24 percent. , Professor at Rensselaer Polytechnic Institute who works on transportation issues.

“The challenge now is urban childbirth,” Mr. HolguĂ­n-Veras said. “And if you look at the numbers, they are only going to increase.”

Experts say that while outbreaks are likely to occur, outbreaks are less likely.

Transport consultant Mark Palazzolo of Kearny, an advisory company, said “the epidemic has accelerated the adoption of e-commerce by five years in a year as users are forced to”.

By 2045, the total volume of freight through New York City, according to city data, is expected to increase from 365 million tons today to 540 million tons a year.

Nevertheless, the online shopping boom will only cause problems like congestion and pollution that were already bad before the epidemic, sending flotillas of delivery trucks across the city and filling the pavement and lobbies with packages.

It has come during an alarming period for New York small businesses, who are suffering from an epidemic, with about 3,000 to be good last August, according to the most recent data available from the Office of Epidemics.

Small businesses struggle to compete online with retailers who typically charge less for similar items and have a more robust distribution infrastructure.

“Building e-commerce capabilities is not easy,” said Jonathan Bowles, executive director of the Center for an Urban Future, a research organization. “It requires so much more than just having a website.”

For large retailers, having warehouses close to consumers will become more important in an increasingly competitive online market.

But the city, once a manufacturing center full of factories, is not particularly welcoming. To protect residential neighborhoods from pollution and traffic, zoning regulations limit the construction of warehouses to designated manufacturing districts.

“There is not much space to build new warehouses, so this is putting most retailers out of development,” said Gabriel Cepheda, founder Pickup Technologies, A warehousing and logistics company.

Construction is underway or scheduled to begin on the new factories, which will have approximately 8.7 million square feet of space, including a 1.2 million-square-foot UPS site in Red Hook, Brooklyn.

The three warehouses under construction will have multiple levels, which is common in Asia, and multiple loading docks that can be used by one company or split between several. Amazon has signed leases on two of them.

The opening of the warehouses has led to some economic benefits, leaving thousands of workers hired – some part-time jobs starting at $ 17.25 per hour – at a time when many city dwellers are unemployed.

Mr. Cepheda is building a home delivery system of “mini-warehouses”. They have recruited more than 1,000 residents in Manhattan and Brooklyn who will pay for retailers to use their apartments to store goods and ship them out for delivery.

Amazon, which owns Whole Foods, has also used grocery stores to fulfill online orders, with its employees often outpacing store customers.

Walmart There was a warehouse in the Bronx Through, it is now a dilapidated shopping site, but later vacated the property, which is now leased by Amazon. Wal-Mart – which has no stores in the city – uses warehouses in Pennsylvania to serve online customers.

Target, which began same-day delivery in the city in 2017 and has about two dozen stores in New York, has used its store as a mini-distribution hub, as it is cheaper to fulfill online orders from the store is. Out-of-town warehouse.

Many smaller companies are feeling pressured to expand their online and distribution operations.

Stop & Shop has hired hundreds of workers to expand its online grocery service in the New York area, including in a warehouse in nearby Jersey City.

The butcher for several high-end restaurants, Pat LaFrieda Meat Purveyors, has spent more than $ 1 million on its online and retail sales operations, selling to shoppers on its website and through Amazon Fresh and Shoprite. That business made up 90 percent of the company’s sales in 2020, more than 15 percent before the epidemic.

“Home delivery will be a staple for the next decade,” Mr. LaFrieda said. “This will be the key to our success.”

The company has remodeled its New Jersey warehouse to prioritize retail sales and design new packaging for online customers.

While Amazon is laying the foundation for online supremacy in New York, Mr. Gordon, the owner of several warehouses, said other retailers will also need to become more agile to respond to people buying in new ways. E-commerce demands put pressure on warehouse workers and drivers to complete and deliver orders on time, as customers now expect.

“It means just-in-time delivery and last-mile delivery,” Mr. Gordon said. “You need to be very close to providing the level of service to your customer that people now expect.”

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