Down to Business: Work continues at Amazon ‘middle mile’ facility in Rensselaer County – The Daily Gazette

Work continues apace at the new “middle mile” facility under construction for Amazon in Rensselaer County, despite a company-recognized mismatch between consumer demand and warehouse capacity.

The facility, off Routes 9 & 20 in Schodack not far from the 1 million-square-foot Amazon fulfillment center that opened in 2020, will be part of the e-commerce giant’s logistics network.

Served primarily by 18-wheelers, “middle mile” centers bring together ordered goods from far-flung, “first mile” inventory locations, bundle them into geographically organized loads, then send them off to “last mile” delivery stations that get them into customers’ hands.

The Schodack facility will operate 24/7 and encompass nearly 280,000 square feet on 56 acres. Scannell Properties, an Indiana real estate developer, secured the site and is overseeing the project, as it did for the nearby Amazon fulfillment center.

Schematics for the facility show parking for more than 400 employees, 78 loading-dock slots, and nearly 300 truck trailer parking spaces. Workers would be part-timers on four- to six-hour shifts running around the clock, an Amazon representative told the town.

In a first-quarter conference call in April, though, company executives admitted that Amazon’s pandemic scramble to meet demand for goods by rapidly building up its distribution network now has it working just as hard to “rightsize” capacity.

“[W]e made conscious decisions in 2020 and early 2021 to not let space be a constraint on our business” and built “toward the high end of a very volatile demand outlook,” Chief Financial Officer Brian Olsavsky told analysts.

Now that demand is stabilizing, “we see an opportunity to better match our capacity to demand,” he said.

Part of that strategy appears to be canceling or delaying facilities.

Media reports in Rochester, for instance, indicated last week that a nearly 3 million-square-foot fulfillment center in suburban Gates, expected to open in September, has been pushed back to next year. A middle-mile facility in nearby Ogden, about the size of the planned Schodack center, may be more iffy.

The industry newsletter Modern Shipper earlier this month listed 16 warehouses nationwide that Amazon has canceled or delayed.

Marc Wulfraat, founder and president of supply chain consultant MWPVL International in Montreal, which maintains an online database of Amazon facilities worldwide, said he had not heard any rumblings about the new Schodack center.

He said Amazon has just two middle-mile sites in New York now, near Buffalo and on Staten Island. The former can handle upstate from Syracuse west, and Staten Island can serve downstate.

But Schodack, he said, “is critical to service the Albany market efficiently.”

“Greater Albany has 900,000 people, so I would suggest that this is too important to delay,” Wulfraat said. “This type of facility is key to enabling Amazon taking over their own last-mile delivery and enabling next-day and two-day delivery service levels.”

An Amazon spokesman declined comment on the Schodack site.

Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at [email protected].

Categories: Business, Opinion