The San Diego North Economic Development Council (SDNEDC) hosted a “Lunch and Learn” event at the Green Dragon Tavern & Museum in Carlsbad late last month (April 27) featuring speaker Stephen Maduli-Williams, manager of economic development policy for Amazon.
“Amazon has been very active in San Diego County, and North County more broadly,” said SDNEDC CEO Erik Bruvold, adding that the online retail giant’s plans are of special interest for those in the industrial warehouse and commercial real estate industries. “We want to have Stephen talk about how that fits together with Amazon’s efforts to do last mile delivery and get us our goods we order online.
“Amazon represents one of those leading indicators of something that has fundamentally transformed in a post-COVID world,” he continued. “We are working and shopping and interacting in a fundamentally different way. And those trends like adopting online shopping, some people say, were accelerated by two decades in two years.”
Maduli-Williams, who gave his presentation virtually, explained that his core responsibility at Amazon is working with jurisdictions to “smooth out the process” of looking for appropriate sites in size and use to grow the company’s network.
In the last two years, Amazon grew that network to over 20 operations in San Diego County, he said. Those operations include a large fulfillment center opened in Otay Mesa last year. Another fulfillment center, also in South San Diego County, is slated to open in 2024, he added.
In addition to “first mile” fulfillment centers, which can be as large as 4 million square feet and employ upwards of 5,000 people, Amazon also operates “second mile” sortation centers where the company tags items for delivery by either USPS, UPS or its own trucks.
Sortation centers can be as large as 800,000 square feet and employ 200 to 1,000 people depending on the size.
Amazon’s most common facilities are its “last mile” delivery stations, located in urban or semi-urban areas and ranging in size of 50,000 to 500,000 square feet. Maduli-Williams said delivery stations operate from 10 a.m. to 8 p.m. to avoid local traffic.
In August of last year, a 143,000-square-foot Amazon delivery station proposed for the Ocean Ranch industrial park in Oceanside was ultimately denied by the Oceanside City Council after nearby residents complained it would add too much noise to their neighborhood.
Although the Oceanside facility wasn’t mentioned at the lunch presentation, during the Q&A; portion, Bruvold asked Maduli-Williams how Amazon will address growth and demand as available warehouse space and real estate to build on in markets like San Diego dwindle.
‘It makes us turn over every stone to find the right site for a market and forces us to use our imaginations and be creative in terms of how we can fulfill the demand,” Maludi-Williams said. “For instance, if we’re trying to fulfill the demand in San Diego, and we can’t find a site in San Diego, then we find a site in Chula Vista or National City and think through operationally how we address the supply and demand issue in real estate based on what we need to have on an operational level.”
Maludi-Williams said that recent demand for online retail was fueled by “pandemic-level activity” so Amazon is looking to see if the activity will level off or if the vacancy rate for warehouse space will go back up.
“I think we’re all kind of waiting to see what happens by the end of this year,” he said, adding that California is more competitive and costly to find real estate than other states.
Although space for larger facilities is limited, Maludi-Williams said Amazon still has “areas of growth” in the region and pointed to its Amazon Fresh facilities that fulfill same-day grocery deliveries.
An Amazon Fresh opened May 5 in Murietta and the company plans on opening another in Poway by the end of the year.
“Our corporate presence in San Diego County is beginning to grow as well,” Maludi-Williams added.
Employment and Education Opportunities
After explaining the different facility types in Amazon’s network, Maludi-Williams discussed employment at the company.
“We’re really excited about the benefits and opportunities we provide,” he said, adding that the baseline wage for Amazon “associates” is $15 an hour, but national average starting entry-level wage is $18 an hour.
Maludi-Williams also pointed out that Amazon offers full medical, dental and life insurance; 401K plans with a 2% match; and employee leave time. “Everyone in company receives the same benefits package – managers and senior executives get the same as warehouse workers.”
Amazon also offers resources to help associates with education, including $6,000 a year for associates degrees or certificates, as well as bachelor’s degrees for employees working at least 30 hours a week, Maludi-Williams said.
“This program has been really well received. Right now, we have over 2,000 colleges and universities across the country that are signing up to join the program. The demand has been pretty intense both on the associate side and the university college side,” he said, adding that “a warehouse job is not a dead-end job.”
In addition to direct employment, Amazon also has a “Delivery Service Partner” program that allows entrepreneur businesses to operate Amazon delivery vans on the company’s behalf. A typical partner will operate a fleet of 20 to 30 vans and hire independent drivers that do not work for Amazon but wear Amazon uniforms, Maludi-Williams said, adding that partners can operate a business with as little as $10,000 startup capital.
In the Q&A;, Maludi-Williams was asked about whether Amazon would look to provide staff housing as it grows in San Diego. He said the company is currently focused on a housing fund it launched a year ago.
“And to be perfectly honest, we’re still going through the process of evaluating how that fund will operate,” he said, adding that Amazon is currently funding affordable housing in Nashville and Seattle and the company “will evaluate that effort and see if we need to move in other directions when it comes to affordable housing.”
CEO: Andy Jassy
Business: Online retail and delivery
Stock: AMZN (NASDAQ)
Revenue: $469 billion
Notable: Amazon is the world’s largest online retailer.