Amazon delivery infrastructure strained as COVID-19 outbreak sparks surge in online shopping

Amazon delivery infrastructure strained as COVID-19 outbreak sparks surge in online shopping

Amazon’s fulfillment center in Dupont, Wash. (GeekWire Photo / Kevin Lisota)

With thousands of Americans telecommuting and self-isolating to slow the spread of COVID-19, Amazon’s Prime and Fresh delivery services are grappling with high demand and inventory issues, as warehouse workers report increased order volumes.

Amazon is out of stock on a number of household staples and popular items, according to the company’s COVID-19 response page.

“You will also notice that some of our delivery promises are longer than usual,” the site says. “We are working around the clock with our selling partners to ensure availability on all of our products, and bring on additional capacity to deliver all of your orders.”

The consumer impact: Amazon can no longer guarantee two-day delivery on all Prime orders and some of the program’s 150 million subscribers customers are already experiencing delays. The Amazon Fresh website warns grocery deliveries “may be temporarily unavailable due to increased demand.” Amazon Fresh did not have any delivery windows available in the Seattle area as of Monday morning.

The increased demand comes as Amazon navigates supply chain threats from slowed or shuttered factories in China. Amazon did not immediately respond to questions about the delays.

The worker impact: The Seattle tech giant has asked all employees who can work from home to do so, an option unavailable to warehouse workers and delivery drivers. The company is providing two weeks of paid time off to all employees diagnosed with the virus or placed under quarantine.

Amazon is spending $25 million to help its network of independent delivery drivers, Amazon Flex workers, and seasonal employees deal with disruptions caused by the outbreak. The Amazon Relief Fund will provide grants equal to about two weeks’ pay for workers who have the virus or are quarantined. Grants are also available to workers facing financial or other hardships. Several warehouse worker groups have been circulating blog posts and petitions calling for more comprehensive sick time.

Other changes: Amazon has paused all fulfillment center tours, canceled large events, and shifted to virtual job interviews.

Bottom line: High demand is already causing delays for Amazon Prime and Fresh customers, a phenomenon that could be exacerbated by slowed imports or outbreaks of the virus among warehouse workers, who are already fielding high volumes of orders. Experts predict Amazon’s delivery infrastructure “will falter,” Motherboard reports.

However, some predict that Amazon will be one of the companies least impacted by a potential recession despite the disruptions. Analysts with RBC Capital Markets wrote on March 13 that Amazon “will be only modestly impacted” during a global financial crisis, due to growing reliance on the company for consumer staples, and expectations of continued growth in its Amazon Web Services cloud division.


via GeekWire

March 16, 2020 at 01:35PM