Amazon is significantly increasing its use of robots, including its first autonomous robot, Proteus, across its global fulfillment centers, in an effort to enhance e-commerce sales, cut costs, and expedite order fulfillment.
In 2024, Amazon achieved its fastest delivery times on record. The Seattle-based company saw over a 65% increase in the number of items delivered to Prime members in the United States on the same day or overnight during the fourth quarter, compared to the previous year.
This move by the world’s largest online retailer signifies increased competition, with companies such as Walmart also trying to boost delivery efficiency to meet customer demand. Amazon aims to further reduce customer wait times, with a goal of delivering essentials like drugs within an hour using robots, drones, and other advanced technologies to refine its logistics network.
As part of its strategy, Amazon has redesigned its U.S. inbound delivery processes to receive and prepare products at cross-dock warehouse facilities located near ports and rail yards before distributing them to fulfillment centers.
“We’re continuing to invest in capacity for our fulfillment and transportation network to support future growth,” CEO Andy Jassy told investors last Thursday. “We’re also investing in same-day delivery facilities in our in-bound network, as well as robotics and automation. While still in its early stages, our inbound efforts have improved our placement of inventory so even more inventory is closer to end customers.”
According to a recent Morgan Stanley research report, Amazon’s increasing number of robots in its fulfillment centers worldwide could lead to annual savings of $4.5 billion to $10 billion by 2030 if they handle 30% to 40% of orders. These robots are designed to perform almost every task a human would, including picking, packing, sorting items, and inventory management, which account for about 60% of fulfillment costs.
Over the last three years, Amazon has developed six new warehouse robot models that can handle almost every stage of the fulfillment process.
“What we’ve seen recently is the next tranche of robotics initiatives have started hitting production” in locations such as the company’s new fulfillment center in Shreveport, Louisiana, Jassy said. “We’re very encouraged by what we see there.”
He stated that the company is expanding robotics use to other facilities in its network, some of which will be new and some retrofitted. Jassy also mentioned that the company is far from reaching the full potential of using robotics to improve costs and safety in its fulfillment operations.
Amazon’s fulfillment center in Shreveport, which opened last fall, has cut processing costs by 25% during peak times, according to the Morgan Stanley report.
Additionally, Amazon continues to expand its global warehouse footprint, which currently encompasses more than 679.6 million square feet across approximately 2,672 facilities. The company has plans to add another 62.6 million square feet through over 200 planned facilities worldwide, with over half of these being smaller package delivery centers closer to customers. Data from MWPVL International, a supply chain consulting firm, supports this information.
Morgan Stanley suggests a continued expansion of Amazon’s warehouse network to support further growth, along with upgrading the existing footprint with next-generation robotics. The rate at which Amazon transitions volumes to robotics-enabled warehouses will depend on the speed of construction, retrofitting, and the time it takes to bring new robotics plants online, which typically ranges from one to two years.
