• Bank of America expects Amazon’s own shipping and logistics service to become a business worth up to $230 billion by 2025.
  • The firm says Amazon has spent roughly $60 billion in retail capital expenditures and capital leases over the past 6 years to build out its fulfillment infrastructure and delivery capability.
  • Amazon now runs over 1,100 warehouses in the US. Its warehouse footprint globally is the equivalent of over 7,300 football fields, the firm said.
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Amazon has been significantly expanding its delivery and fulfillment capabilities over the past few years, building hundreds of new warehouses and leasing dozens of aircraft to ship packages on its own.

Those efforts could help build up a major logistics business within Amazon that’s worth up to $230 billion by 2025, according to a note published by Bank of America on Monday. The firm says Amazon’s ability to handle storage and shipping for merchants, both on and off Amazon, could one day make logistics the company’s “4th leg of the services stool,” after its e-commerce, cloud, and advertising businesses.

“Retail, cloud & advertising are still top reasons to own [Amazon stock], but we see expanding delivery capabilities as a strategic asset for the retail business and a material opportunity to roll out another high-margin service leveraging existing capacity,” Bank of America wrote in the note.

The bullish estimate reflects Wall Street’s confidence in Amazon’s ability to turn its massive investments in logistics into a viable business.

The note said Amazon has spent $60 billion in retail capital expenditures and capital leases over the past 6 years to build out its fulfillment infrastructure and delivery capabilities. Roughly $10 billion of that investment came in 2019, the bank said, which is nearly the equivalent of the $13 billion capital expenditure spent in the year by UPS, FedEx, and USPS — combined.

For example, Amazon had just 16 fulfillment centers in the US in 2009, but that number has now grown to 1,137 in total, with 192 additional facilities planned to open this year, the note said. Its warehouse footprint was 173 million square feet in the US in 2019 and 262 million square feet globally — the equivalent of over 7,300 football fields, the note said. Amazon is particularly focused on expanding its network of last-mile Delivery Stations, reflecting its desire to cover more deliveries that go to the final customer.

Bank of America on Amazon warehouse footprint



Bank of America


With the expanded shipping infrastructure, Amazon is delivering more of its own packages than ever. In the US, Bank of America estimates Amazon to have delivered 2.3 billion of its own packages in 2019, making it the fourth-largest delivery company behind USPS, UPS, and FedEx. Globally, Amazon is estimated to have delivered 3.5 billion packages, or roughly half of its own orders, the firm said.

Amazon wants to take its shipping service beyond its own marketplace, to merchants not selling on Amazon. While that effort hit a snag earlier this month, when Amazon abruptly paused its beta shipping service, Bank of America remains optimistic it would eventually turn into a much bigger revenue stream. By 2025, it expects Amazon to capture 15% of the e-commerce deliveries not sold on Amazon, adding roughly $15 billion in revenue. In total, it expects Amazon to deliver 7.5 billion to 9.7 billion packages on its own in the US by 2025.

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