Inside Amazon’s first Alaska delivery station

With Anchorage streets mostly empty on an early November morning, dozens of workers at a 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 flood of shipments.

A daily Amazon Air Cargo jet had arrived in Anchorage from Seattle the night before, and more than 15,000 boxes and envelopes would soon be hitting doorsteps in Southcentral Alaska.

Just outside, drivers began loading delivery vans with packages.

“Five minutes!” shouted Mitchell Cox, who manages the delivery crews, letting another wave of drivers know they would soon be off for the day.

Amazon, the world’s largest online retailer, opened its first distribution center in Alaska a year ago. This comes well after the company opened nearly 500 other delivery stations across the United States

But company representatives say this is unusual.

Unlike delivery stations in the Lower 48, which receive packages from semitrucks, it gets its product from air deliveries.

It remains to be seen how this facility will transform Alaska’s economy. A larger Amazon presence would naturally mean continued pressure on brick-and-mortar retail, which has struggled for years against rising e-commerce, an Alaska economist said.

One thing is for sure: Amazon package deliveries are on the rise in the state.

The delivery station marked its 3 millionth package delivery last month, said station manager Austin Embey.

“And it’s really hectic, especially during the holidays,” he said, as heavy metals blare from conveyor belts and speakers.

14 packages for everyone annually

In a first, Amazon Air plans to fly two large cargo jets a day into Anchorage to help speed up deliveries by bringing in packages for the holiday season.

The jets will help the delivery station move about 20,000 packages daily for several weeks during the holidays, Mbe said.

On normal days, the company delivers about 15,000 packages daily from Kirtwood to Big Lake, covering Anchorage, Wasilla and the state’s urban heart.

That’s an average of about 14 packages annually for every person in the region, including newborns.

Usually the company doesn’t know what’s inside. But electronics, dog food, beauty products and bottled water are typically shipped through Amazon facilities, Amazon spokesman Matthew Guardia said.

Some of the biggest exports are obvious, Mbe said.

“I’ve seen snow throwers, snow shovels, and in the summer, I’ve seen more kayaks,” he said.

‘Sure Busy’

The station’s target 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 days, even weeks, he said.

At the time, the company received packages into the region through the Amazon Air Gateway at Ted Stevens Anchorage International Airport.

A gateway like the one at Fairbanks International Airport relies on third-party delivery contractors like the US Postal Service.

Now, Amazon’s delivery center in Anchorage has its own delivery drivers, more than 60 of whom are under two private contractors, Embey said.

About 100 employees work in the warehouse, often sorting packages overnight.

When the number of warehouse employees increases to 150, the company will hire more workers during the holiday season.

Warehouse workers start at $21.50 an hour, with flexible hours, health care starting at 20 hours, and financial aid for higher education, Guardia said.

“We’re definitely busy,” Mbe said.

Enhanced Deliveries with AI

The delivery station has multiple deadlines for each step, Mbe said.

He said it was “very tight” to get drivers out that day. “But we’ll make it, we’ll make it.”

Each package is digitally tracked, allowing shoppers to follow their package’s journey through the app. The computer system uses artificial intelligence algorithms for ordering and distribution, Embe said.

Inside the station, workers scan barcodes on packages and lights brighten in certain bays that show them where to put them. The packages are sorted into smaller and smaller groups, eventually up the neighborhood and down the street, Embe said.

Amazon’s computer system creates routes for the driver, directing packages to be placed in the van for proper disposal.

“It calculates the best way for efficiency and security,” said Mbe. “So it will reduce left turns. It will try to avoid areas known for high traffic during rush hour.”

“So the drivers start on their device and it says, ‘Drive here, grab this package and drop it off.’ Drive to the next one, drop this one,” he said.

Packages are not warehoused at the facility.

“Our goal is not to save anything here,” Mbe said. “So all the packages you see here are going out today.”

Mbe said delivery times have improved since the station opened after training new staff and improving routing accuracy.

Last winter, the snow-covered streets also hampered the vans. Drivers carry shovels and other gear for digging.

“Weather is probably our biggest challenge,” Mbe said.

Pressure on retail sales, but a boost for some

The 90,000-square-foot building has undergone extensive upgrades since Amazon began leasing it two years ago. That brings Amazon’s investment in Alaska to $80 million since 2010, the company said.

Amazon supports 400 independent sellers in Guardia, Alaska, mostly 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 increased presence in the state include the cost of Amazon job holders, increased activity at the airport and gas stations selling more fuel, said Dan Robinson, director of research for the Alaska Department of Labor and Workforce Development.

A larger Amazon footprint would mean continued pressure on the retail industry, where jobs have struggled for years, he said. The industry was hit particularly hard during the pandemic’s online shopping boom.

“As the market continues to grow, some of the retail dollars that go to our local retailers will be transferred to Amazon,” he said. “This has been the case for at least a decade, and as consumers get more comfortable with it, that trend will continue.”

2024 Anchorage Daily News. Distributed by Tribune Content Agency, LLC.