Amazon.com preparing for holidays at new Chattanooga and Charleston fulfillment centers

Amazon.com preparing for holidays at new Chattanooga and Charleston fulfillment centers

November 20th, 2011 by Mike Pare in News

An employee works at an Amazon distribution center in Fernley, Nev. Contributed Photo

FIRST SHIPMENT

Amazon's Chattanooga center sent a printer cartridge to a customer in California as its first shipment.


BY THE NUMBERS

• $10.88 billion - third quarter net sales

• 44 percent - third quarter net sales jump from year ago

• $79 million - third quarter operating income

Source: Amazon

Jeff Wardeberg of U.S. Xpress Enterprises says its freight business with Amazon has surged by more than 300 percent in the year since the Internet retailer unveiled plans for two Chattanooga-area facilities.

"They've moved into our top 10 accounts," said Wardeberg, the local trucking firm's chief operating officer. "The opening of the Chattanooga distribution center allowed us to expand our portfolio with Amazon."

The online retailing giant is gearing up its new Chattanooga and Charleston, Tenn., fulfillment centers for Black Friday, Cyber Monday and Christmas.

Scores of trucks from U.S. Xpress, Covenant Transportation Group, UPS, FedEx and other companies go in and out of the centers as they deliver and take out freight for the two Amazon facilities.

Also, the Seattle-based company continues to hire as it aims to have about 4,500 workers at the pair of local centers by the end of 2011. That's making Amazon one of the biggest employers in the region and likely the fastest ever to reach that level of employment here.

Amazon employee Dalton Hodgson, of Cleveland, Tenn., said last week the Bradley County center continues to hire.

"I see people for orientation every day," he said.

Hodgson said a lot of goods are passing through the huge facility. He said he understands that about 700,000 units will go through it in November alone.

Angelia Bright, another Amazon worker, said the ramp-up of the center is "going great."

"There's a lot of training," she said.

According to Amazon, its first shipment out of the Chattanooga center occurred last month when a printer cartridge was sent to a customer in California.

Don Davis, editor of Internet Retailer, said he believes Amazon is readying for a big Christmas season.

"They're growing sales nationally two to three times the rate of the economy as a whole," he said.

Much of the growth is driven by such products as its Kindle eBook, Davis said, as it makes it easy to download publications to the device.

"It's like what Apple did with music," he said, citing its iTunes website.

LANDING AMAZON

Wardeberg recalled that in order to secure more of Amazon's business, company President John White, himself and others traveled to Seattle last year for what turned out to be an all-afternoon meeting.

Jeff Wardeberg of U.S. Xpress Enterprises

Photo by Contributed Photo/Times Free Press.

"They laid out their expectations," Wardeberg said. "We put policies and procedures into place to make sure our service levels were exceeding their expectations."

Marc Lundberg, a U.S. Xpress vice president and team business unit general manager who took part in the meeting, said Amazon expects a high level of service.

"It's getting it there on time where it needs to be," he said.

To meet customer demand, Amazon is spending heavily on new distribution centers such as those in Hamilton and Bradley counties. Amazon estimated spending $139 million on those two facilities.

The Internet giant also is leasing space outside Nashville for another such center, and there's talk of at least one more.

Davis said Amazon not only ships for itself but also for other companies.

"A third of the products ... are sold by other retailers through Amazon," he said. "Amazon offers retailers a fulfillment service as well."

Davis said Amazon typically invests in sophisticated technology, and that's likely true inside its distribution centers.

"They make money selling services to other companies," he said.

For U.S. Xpress, Wardeberg termed the growth of the Amazon business "sensational."

"We're pulling quite a bit of freight out of there on a daily basis," he said, estimating well in excess of 50 truckloads a week just from the Chattanooga and Charleston sites alone. Wardeberg added that the trucker services the company countrywide.

Wardeberg predicts substantial growth from Amazon in the future.

"I would think our growth will be tremendous," he said. "It might not be 300 percent every year, but just to get them to our top 10 is a phenomenal achievement in a year."