A company providing access to online trading platforms has calculated that in the past 10 years, Amazon’s global logistics costs have gone up 1307% to $151.8bn (€136.3bn) at the last count in 2021.
The staggering figure is around 32% of the company’s net sales, says Tradingplatforms, which also calculates that in 2012 the global giant’s logistics bill was a fraction of 2021's at $11.6bn.
With Amazon being a huge player in global logistics real estate, the data shows how much it has invested in its infrastructure.
Says Edith Reads, a financial analyst at Tradingplatforms: ‘The rise in logistics costs is driven by a dramatic increase in Amazon’s direct shipments. In 2012, Amazon had a customer base of about 180mln; today, that stands at over 300mln. Its shipments have grown in tow with that expanded customer base.’
The firm points out how Amazon’s business model has changed significantly over 10 years, now selling everything from groceries and clothing to electronics and home goods.
Amazon RE slowdown?
However, the data comes weeks after Amazon’s CFO Brian Olsavky, signalled to real estate investors and developers that it sees capital expenditure moderating.
In a Q4 earnings update, he said Amazon would continue investing around 40% of its capital on building internet networks and systems; 25% on transportation assets; and about 5% on office and retail construction, but it but would taper the 30% of capital investment earmarked to expand fulfilment capacity.
The CFO reportedly said: ‘We see that moderating’ adding that Amazon’s ongoing investment in fulfilment capacity expansion will be adjusted to match rather than exceed the growth rate of its underlying businesses. The company is developing fulfilment centres for its same day Prime customers, but looks likely to reduce purchases of industrial properties and leasing activities.
