The pandemic-induced shift from brick-and-mortar to online stores has accelerated the expansion of Amazon's logistics footprints in the US to meet a fast-growing domestic demand.

In the first three quarters of 2020, the e-commerce giant announced a record 204 US interstate logistics, distribution and transportation projects, according to investment monitor fDi Markets. 

Amazon’s record number of US interstate investments — domestic projects made by companies headquartered in a different state to the final investment destination — is almost four times as many the number announced during the whole of 2019.

These investments involved capital expenditure of $21.4bn (including estimates), an increase of 365% from 2019, while the estimated number of jobs created jumped more than three fold.

Arizona was the US state that benefited most from Amazon’s logistics expansion, garnering 16 projects in the first nine months of this year, according to fDi Markets. Texas and New Jersey each attracted 15 projects in the same period, while New York state and Illinois both gained 14. 

Notable projects include a May 2020 pledge to create 8800 logistics-related jobs in Texas, 6000 jobs in Arizona, and 3000 jobs apiece in Illinois, Maryland and Connecticut. Amazon hired 36,400 people in the three months to June 30, bringing its overall US headcount to 876,000, an increase of 34% compared to a year earlier.

A recent company release stated that it had more than 600,000 full- and part-time employees in the US, across more than 40 states and 250 different counties. The e-commerce giant has invested more than $350bn in the US since 2010.

Global expansion

While the inward-looking attitude of US companies is having a dampening effect on global investment, other nonstore retailers are continuing to expand their logistics networks. Chinese e-commerce giant Alibaba, Argentina’s MercadoLibre and US-based Walmart have all announced projects.

Amazon has also enhanced its logistics operations globally, albeit on a smaller scale to its interstate investments. In western Europe, the company announced 46 projects from January to September, in comparison to 31 during 2019. The company also added to its infrastructure in the Asia-Pacific region.

The intensity of Amazon’s interstate activities look set to continue, solidifying further the digital shift. Continued investments show that, despite the shrinking of the physical retail space, physical infrastructure will still act as an important support mechanism and thrive from the online marketplace.