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Expert Predicts It Could Take Years To Recalibrate Amazon's Warehouse Capacity

Amazon has spent months whittling down its warehouse inventory, but new data suggests it could take years for the e-commerce giant to recover from the building binge it went on in the wake of the pandemic.

The company saved $4B in 2022 by reeling in its warehouse expansion to 52M SF, according to MWPVL International data reported by Business Insider. While a significant pivot for Amazon, last year’s growth equals about a third of what Walmart has added throughout its history.


Amazon’s course correction, spurred by economic turmoil and a decline in product sales growth, came after the company added 125M SF in 2020 and 137M SF in 2021, per MWPVL’s estimates.

“They started opening up buildings at almost an irrational pace in 2020 and 2021, especially in the United States,” MWPVL President Marc Wulfraat told Bisnow in a recent podcast interview. "In some cases when we were updating the database, we were looking at the map and saying, 'Well, some of this just makes no sense.' Putting a delivery station, brand new, right up beside another one they already operate."

Amazon canceled or delayed millions of square feet of industrial construction last year. It also closed dozens of existing logistics facilities, many of which were 150K SF or smaller and located in secondary markets. 

The company is likely holding onto larger locations to absorb the operations of smaller facilities nearby, Wulfraat told Bisnow.

Aggressive steps to recalibrate Amazon’s warehouse inventory have yet to make a meaningful dent in usage. Wulfraat’s data estimates the company uses about 65% of its total warehouse capacity, lower than the 85% levels from 2019.

It could take up to three years to restore 2019 usage, which MWPVL said the company should strive to reach before adding more space. The exception, Wulfraat said in a Jan. 6 interview, would be in certain geographic areas that are undersupplied, such as Buffalo, New York.

"If the company adds new space this year and next, then it is mainly to address shortfalls that exist with specific building types in specific metro markets," he said. "In general, Amazon is doing everything possible at the moment to reduce operating expenses and capital investments, and rightly so."

Based on projects that have already been announced, MWPVL estimates Amazon will add another 73M SF of industrial space to the U.S. in 2023; however, Wulfraat said that number will likely be reduced by more than half due to expected delays and cancellations.

"Prior to 2020, Amazon opened between 23M and 31M SF per year in the U.S.," he said. "Given the current austerity measures being taken, I would suggest that 2023 will fall into this range."

An Amazon spokesperson called the MWPVL findings reported by Business Insider “categorically inaccurate.”

Wulfraat likened Amazon's reaction to "poking the bear," and said his data has historically been "pretty close" to what Amazon discloses in its 10K filings.

"I am a mathematician by training, and I have been consulting in the supply chain industry for 36 years, so we have to be obsessed with accurate numbers to even be in business," Wulfraat told Bisnow. "We don’t claim to have perfect data on Amazon, but we stand 100% by our research."

UPDATE, JAN. 6, 1:41 P.M. CT: This story has been updated to include comments from Marc Wulfraat.