Amazon Plans Further Logistics Expansion After More Than Tripling Profit

E-commerce giant Amazon, whose sales have benefited enormously from the coronavirus pandemic, reported on Thursday a Q1 2021 profit of $8.1B, up from $2.5B a year earlier. Its revenues spiked 44% year-over-year to $108.5B.

Flush times like these will allow Amazon to continue to invest massively in its logistics capabilities, which is one of the company's long-standing goals, including a larger distribution footprint.

On an earnings call on Thursday, Amazon Chief Financial Officer Brian Olsavsky said the retailer's capital expenditures increased 80% over the trailing 12 months, including funding for the likes of logistics facilities and data centers.

Olsavsky said the company has opened more warehouses, though he didn't specify a number, and Amazon expanded its fleet of airplanes and trucks. Altogether, the online retailer grew its in-house logistics operations, which it calls AMZL, by 50% year-over-year, Olsavsky said. 

"We are continuing to invest, and we'll see a large investment in this area through 2021 as well," he said. "We do think that it may also spill to 2022." 

Worldwide, Amazon has more than 175 operating fulfillment centers totaling more than 150M SF where its employees pick, pack and ship customer orders.

In January, the company acquired 11 aircraft from Delta Air Lines and WestJet to expand its Amazon Air fleet to more than 85 aircraft by the end of 2022. The retail behemoth announced new Amazon Air sites in Toledo, Ohio, and Fairbanks, Alaska, and plans to expand existing operations in Canada this summer.

Amazon's physical retail presence continued to grow during the first quarter of 2021. Amazon Fresh grocery stores opened in four new places in the U.S. during Q1: Oak Lawn and Bloomingdale, Illinois, and Fullerton and Long Beach, California. Globally, there are 15 physical Amazon Fresh stores.

Amazon opened its first international physical retail stores using its Just Walk Out technology, which dispenses with the need for checkout clerks or other human contact, with the launch of three Amazon Fresh locations in London. These new convenience stores allow shoppers to enter a store, take what they want, pay and leave without stopping to check out.