Nov. 25 – With the streets of Anchorage largely empty on an early November morning, dozens of workers at the new Amazon delivery station used small devices on their fingers to scan barcodes on packages. Details appeared on smartphones on their forearms, helping them organize the flow of shipments.
Amazon Air’s daily cargo plane to Anchorage had arrived from Seattle the night before, and soon more than 15,000 boxes and envelopes would land on doorsteps in Southcentral Alaska.
Just outside, drivers began filling vans with packages.
“Five minutes!” shouted Mitchell Cox, who leads the delivery teams, letting a new wave of drivers know they would soon be free.
Amazon, the world’s largest online retailer, opened its first delivery station in Alaska a year ago. It came long after the company opened nearly 500 other delivery stations across the US
But this one is unusual, company representatives say.
The country gets its products from air deliveries, unlike delivery stations in the Lower 48 that get their packages from semi-trucks.
How exactly the facility will change Alaska’s economy remains to be seen. Of course, an expanded Amazon presence could mean continued pressure on brick-and-mortar retail, which has struggled for years with surging e-commerce, an Alaska economist said.
One thing is certain: Amazon package delivery is growing in the state.
The delivery station marked its three millionth package delivery last month, station manager Austin Empey said.
“And it’s getting busier, especially now that the holidays are just around the corner,” he said as the boxes slid down the conveyor belts and heavy metal blared from the speakers.
14 packages annually for everyone
In a first, Amazon Air plans to soon fly two large cargo planes a day to Anchorage to bring holiday packages and speed up delivery.
The jets will help the delivery station transport about 20,000 packages per day for several weeks during the holidays, Empey said.
On normal days, the company delivers about 15,000 packages daily from Girdwood to around Big Lake, a region that includes Anchorage, Wasilla and the state’s urban heart.
That’s an average of about 14 packages per year for every person in the region, including newborns.
The company usually doesn’t know what’s in it. But electronics, dog food, beauty products and bottled water are typically shipped through Amazon facilities, said Matthew Gardea, an Amazon spokesman who showed journalists around the station.
Some large shipments are obvious, Empey said.
“I’ve seen snowblowers and snowplows, and during the summer I saw more kayaks,” he said.
‘It’s definitely busy’
The station’s goal is two-day delivery from the time of order, he said. That service is included for Amazon Prime customers.
Before Amazon opened the station — a former Sears warehouse on Dowling Road near Seward Highway — deliveries could take several days or even weeks, he said.
At the time, the company transported packages to the region through its Amazon Air Gateway at Ted Stevens Anchorage International Airport.
The gateway, similar to the one at Fairbanks International Airport, relies on third-party delivery providers, such as the US Postal Service.
Now, Amazon’s Anchorage delivery station has its own delivery staff, more than 60 of them under two private contractors, Empey said.
About 100 employees also work in the warehouse, who largely sort the packages at night.
The company will hire more workers for the holidays, when the number of warehouse employees should increase to 150.
Warehouse workers start at $21.50 an hour, with flexible hours, healthcare starting at 20 hours and financial aid for higher education, Gardea said.
“We’re definitely busy,” Empey said.
Deliveries optimized with AI
The delivery station has multiple deadlines at every step, Empey said.
Things were looking “pretty tight” that day to get the drivers out, he said. ‘But we’ll make it. We’ll make it.’
Each package is digitally tracked, allowing shoppers to track their package’s journey via app. The computer system uses artificial intelligence algorithms to refine sorting and delivery, Empey said.
At the station, lights come on in certain bays after employees scan barcodes on packages to indicate where they should be placed. Packages are sorted into smaller and smaller groups, eventually reaching the neighborhood and the street, Empey said.
Amazon’s computer system also builds routes for the driver and guides the placement of packages in the van for orderly disposal.
“It calculates the best route for efficiency and safety,” Empey said. “So it will minimize the number of left turns. It will try to avoid areas known for heavy traffic during rush hour.”
“So literally the drivers press start on their device and it says, ‘Drive here, pick up this package and drop it off. Drive to the next one, drop this off,'” he said.
Packages are not stored at the facility.
“Our goal is we don’t want to store anything here,” Empey said. “So all the packages you see here are going out today.”
The station’s delivery times have improved since it opened as new employees were trained and route precision improved, Empey said.
Last winter’s snow-covered streets also hampered delivery vehicles. Drivers carry shovels and other equipment for excavation.
“Weather is probably our biggest challenge,” Empey said.
Pressure on retail, but a boost for some
The 90,000-square-foot building underwent extensive upgrades after Amazon began leasing it a few years ago. It brings Amazon’s investment in Alaska since 2010 to $80 million, the company said.
Gardea said Amazon supports 400 independent sellers in Alaska, which are largely small and medium-sized businesses, he said.
“More than 60% of Amazon sales come from small and medium-sized businesses,” he said.
Other economic benefits of Amazon’s expanded presence in the state include Amazon employee spending, increased airport activity and gas stations selling more fuel, said Dan Robinson, chief research officer at the Alaska Department of Labor and Workforce Development.
An expanded Amazon footprint will also put continued pressure on retail, where employment has been tough for years, he said. The sector was particularly hard hit during the pandemic’s push towards online shopping.
“To the extent that the market continues to grow, some of the retail dollars that have gone to our local retailers will shift to Amazon,” he said. “That’s been happening for at least a decade, and if consumers can get it that much more easily, that trend is likely to continue.”
Correction: This story has been updated to include the correct square footage and ownership status of the Midtown Anchorage building where Amazon operates. The company leases rather than owns the 90,000-square-foot building.
