Amazon Plans to Double Same-Day Delivery Stations

Amazon is double down on the reorganization of its national fulfillment network into regional hubs that service a growing number of delivery stations.

In an announcement this week, Doug Herrington, CEO of Worldwide Amazon Stores, said the e-retail giant is planning to double the number of its same-day delivery stations.

The growing constellation of delivery stations are last-mile outlets that are connected to eight regional fulfillment hubs—with the entire network being directed by an advanced machine-learning AI algorithm that tells them which inventory to move to which customers and when.

Herrington reported that 76% of Amazon’s orders are now being fulfilled by the regional hubs the company established in April.

During Q2 2023, more than half of Amazon Prime member orders were delivered either the same day or the next day in the 60 largest US metros, with Amazon achieving its “fastest Prime [delivery] speeds ever last quarter,” he said.

Herrington attributed the accelerating delivery speeds to the three-pronged initiative that was announced by Amazon CEO Andy Jassy in a letter to shareholders in April.

Jassy announced a coast-to-coast reorganization of the e-commerce giant’s national logistics network into eight “interconnected” regional hubs. The CEO also disclosed the deployment of AI-driven algorithms that predict what customers in regional hubs need and guide inventory placement systems connected to Amazon’s growing network of same-day delivery facilities.

“With more than 300 million items available with free Prime shipping and tens of millions of the most popular items available with free Same-Day or One-Day Delivery, we hit our fastest Prime speeds ever last quarter,” Herrington said.

“Across the top 60 largest U.S. metro areas, more than half of Prime member orders arrived the same or next day. So far this year, we’ve delivered more than 1.8 billion units to U.S. Prime members the same or next day—nearly four times what we delivered at those speeds by this point in 2019,” he added.

Amazon increasingly is using advanced machine-learning algorithms to better predict which items customers in various parts of the country will want and when they will want them. The company is using this information to store these products closer to the customers.

The e-commerce giant also is expanding its capacity to place product in the right fulfillment center in each region.

“This allows us to shorten replenishment times while maintaining the broadest selection of products available to fulfill a customer’s entire order at one time from the Amazon location closest to them,” Herrington said.