- [Narrator] This Amazon
fulfillment center is unlike the ones they've
been using for years, building the industry
standard for fast shipping. It's one-eighth the size. It needs fewer employees, yet, it allows them to deliver even faster. An order here can go from
storage to out for delivery in just 11 minutes. Because of Amazon, customers have come to
expect fast shipping. And Walmart and Target
have met those demands by building systems to beat Amazon's two-day delivery promise. So Amazon is trying to
win the shipping wars by investing in what made them successful in the first place. Speed. - Over Prime Big Deals Day, our fastest delivery was 54 minutes. We don't know yet what the limit is. - [Narrator] Here's how
the king of fast shipping is overhauling its massive
distribution network to shave more days, hours, and even minutes off delivery times. (bright music) - We're delivering between
25 and 30,000 packages a day to our customers. - [Narrator] This facility
in Renton, Washington, is one of 49 same-day delivery
centers across the country. Unlike Amazon's larger warehouses, these smaller sites prepare
products for immediate delivery, a service that's available in more than 90 metropolitan areas. At traditional Amazon warehouses, an order might first be picked
up and packed in one center before being moved to another to be sorted and then to a delivery station
in the customer's area, before finally arriving on a doorstep. Compare that to the same-day centers, which put picking, packing,
and sorting under one roof. The facility here in Renton
only delivers to customers up to an hour away. But that's enough to serve households around parts of Seattle and Tacoma. Centers like this deliver the
100,000 most popular items local customers might
want in hours, not days. - Apple products, like
AirPods, everyday essentials, and then household cleaners. That's what we're driving here
in this particular building. - If you have a right analytics, you can keep the right items
closer to the customers. And those right items will be different at different regions. - [Narrator] The inventory
curation here in Renton, along with AI-driven tech, gets packages to doorsteps faster. - We have things that help
make sure we don't have too similar of an item
sitting next to each other to avoid a mis-shipment
or things like that. - [Narrator] In a process called Stowing, workers store small items in
these bookshelf-like containers on the robotics floor. Larger items, which the
company calls Non-Sortable, live on these shelves. There are diapers, dog
food, even air fryers. That meticulous organization
is key to getting orders to customers in record time. - I was in my building
at about four o'clock on a Friday afternoon and
ordered something in my, and outta my building, and got home within a couple hours and that package nearly beat me. - [Narrator] Say you
order this Amazon Echo. One of the facility's hundreds of robots is assigned to pick up
the pod it's stored in. The picker pulls the item
and places it in a cubby on this wall to be packed. A packer will grab the item,
scan it, and package it here. Your order travels on this conveyor belt just a few hundred feet
away to the dispatch area. - When that sticker is
applied to the package, at that moment, we determine
what route that's gonna go to, how long that route could be, and that's dynamically
happening throughout our day. - [Narrator] The yellow
sticker tells workers which cart selection and cart
the order should be routed to. By the time your order is waiting for a driver to pick it up, only four minutes and
50 seconds have passed since a worker pulled it from the shelf. On average, the company says it takes
11 minutes for an order to travel through this whole facility. Once the packages are
on the outbound docks, Amazon's flex drivers are
notified to load them up. They make deliveries
using personal vehicles, allowing the company to
utilize more drivers. The timing is roughly the same, no matter what you order
alongside your Amazon Echo. - Let's say I ordered three items. We have the ability with our logic, to combine those items from the floor and bring all three of them together. - [Narrator] Amazon says an
eligible order placed by 5:00 PM will arrive by 10:00 PM. Otherwise, it will arrive
early the next morning. This same-day facility
operates 23 hours every day to make that possible. Amazon plans to double the
number of same-day centers in the next few years. - The biggest difference is
that what we're trying to do is reduce the distance between
inventory and the customer as much as we can. - [Narrator] Before, if a shopper in Florida
ordered a pair of headphones, they might have been shipped from Seattle. - Now we're at a big enough scale that we've realized it's
actually more efficient to break the US up into
eight interconnected regions. Today, more than 76% of customer demand is fulfilled from within their region. - [Narrator] Competitors
like Walmart and Target are also speeding up delivery, by fulfilling orders closer to customers. But the key difference? Amazon doesn't have thousands of stores. - These same-day sites are
directly taking on Walmart stores because it's a lot of the items that someone would go to Walmart for to pick up for their house. - [Narrator] Customers'
expectations on speed have also risen. - You have customers
that have come to expect two-day delivery all of a sudden saying, "Well, can I get this item or that item without having to go to the store?" And they've had to really meet
customers where they're at. But the funny thing is, is customers are where they're
at largely because of Amazon. - We see that the faster
our deliveries get, the more customers engage with our store and the more they come back. - [Narrator] And as more and
more retailers try to compete with Amazon and e-commerce, the company is doubling down on speed. - The response has been, "What we already do good,
let's do it even better." And that's sort of is
a way to play defense by playing offense. - [Narrator] Since 2018, Amazon has cut its average
delivery time by more than half. - Whenever you reduce your delivery time, your cost increases exponentially. - With the same-day centers, you're paying gig workers to do their job and they can only put so
many packages in the cars that they're driving around. - [Narrator] To offset some of the cost in speeding up delivery,
Amazon uses Prime memberships, which cost $139 a year. It also has another advantage, the sheer breadth of its business. - Amazon has that power
right now that they're ready to incur some losses in the short-run, because they have that kind of cash, they have that kind of revenue
coming from other things. - [Narrator] Amazon says fast delivery doesn't necessarily mean higher expenses. - Our fastest deliveries are
some of our lowest-cost options because we've really shortened
that fulfillment distance. - [Narrator] The company argues
that the shortened distance also reduces the environmental
impact of delivery, like increased packaging and emissions. - Our same-day facilities
are located very close to dense metro areas. We stock them with very high demand items. That means we have a lot of
packages that go out on the road and they travel much shorter distances. - [Narrator] Labor
researchers and activists also worry about employee safety as the company ramps up its speed. - Amazon has a huge history
of high injury rates at their facilities, and now that they're
trying to go even faster, what does that mean for employees? - Employees go through the
same exact process of picking, packing, and packaging an item and getting it ready to be
delivered in a same-day site, as they do in a regular site. It's just that the distance
traveled is much shorter. - [Narrator] The company says that "From 2019 to 2022, it saw a 23% reduction in
its recordable incident rate, and that it has invested over $1 billion in safety initiatives since 2019." Despite those challenges,
Amazon aims to be - - Fast, faster, fastest! - [Narrator] It's investing
in more automation, electrifying its delivery fleet, and plans to create more
efficiency in rural areas with its drone delivery program. And that's forced other
retailers to step up their game. But Target is taking a different approach. - Our stores can act
like fulfillment centers. - [Narrator] In our next episode, we'll go behind the scenes at Target's first Sortation Center. Can the smallest competitor of the bunch even compete with Amazon
in the shipping wars? (bright music)
