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When Amazon Puts a Warehouse Next Door: ‘We Can’t Escape It’

When Amazon Puts a Warehouse Next Door: ‘We Can’t Escape It’
When Amazon Puts a Warehouse Next Door: ‘We Can’t Escape It’
May 17, 2022   //   

By Ilena Peng and Matt Day

Late last summer, the International Brotherhood of Teamsters hatched an unconventional plan to take on Inc. Rather than trying to organize the 1 million or so frontline workers in the company’s sprawling logistics operation, a California unit of the labor union decided to try persuading cities and towns to halt Amazon’s expansion. The ultimate aim is to protect unionized rivals like United Parcel Service Inc. and lay the groundwork for future campaigns to unionize Amazon facilities.

The Teamsters are focusing on the company’s last-mile logistics hubs, which Amazon calls delivery stations. Typically less than 200,000 square feet, they function as waystations, receiving packages from bigger facilities and handing them off to delivery vehicles, including the dark blue Prime-branded vans that crisscross neighborhoods. Some delivery stations are designed for big, bulky items like kayaks or barbecue grills.

At the end of 2018, there were roughly 100 such facilities in key towns and cities in the U.S. Today, there are more than 600, according to logistics consultancy MWPVL International Inc. While Amazon slowed the pace of delivery station openings last year as the pandemic-fueled surge in online shopping began to decelerate, MWPVL said there are another 160 of these facilities on the drawing board, a testament to Amazon’s determination to get orders to customers the next day if not within hours of hitting the buy button.

Many of the delivery stations have opened a short drive from residential neighborhoods—prompting scattered tension with Amazon. The world’s largest online retailer tends to move quickly and quietly, securing land and government approvals before news of its arrival becomes public, a strategy that makes the company some enemies out of the gate. Labor unions, already at war with Amazon and determined to organize its workers, aim to capitalize on this nascent NIMBYism and block new facilities before they open.

The Teamsters are probably too late to halt Amazon’s expansion into a logistics giant able to rival UPS, which employs more Teamsters than any other company. But every time the union prevents a delivery station from opening, it generates media coverage, deepens ties with local officials and galvanizes support for organized labor.

Unions have struggled to gain a foothold at Amazon, blaming what they deem management-friendly labor laws. Even in pro-labor California, they’re wary of losing elections to represent workers. While the upstart Amazon Labor Union won the right to organize an Amazon warehouse last month in New York, weeks later it lost a second election at a smaller facility right across the street. Amazon, which has urged employees to reject unions, is contesting the first vote. The company says it already offers many of the job perks unions typically seek.

“We have a strategy of taking on the company in all different tracks,” said Jason Rabinowitz, president of Teamsters Joint Council 7, an umbrella organization for the union’s affiliates in northern California and Nevada.

So far much of Teamsters campaign is mostly focused on the greater Bay Area, where the union said it has halted or suspended Amazon facilities in Hayward, Gilroy, Fremont, Santa Rosa, San Jose and other cities. But Teamsters affiliates have also joined campaigns against delivery stations in Colorado and Indiana, and officials hope the pushback grows.

In arguing his case before city councils and zoning boards, Rabinowitz, along with other unions and environmental organizations, has a few examples of what can go wrong. One is Milford, Massachusetts, a Boston-area town that in 2016 became one of the first locations to host an Amazon delivery station.

Neighbors quickly had complaints: delivery drivers urinating behind hedges, trucks rumbling down once-quiet residential streets, drivers colliding with unsuspecting locals. News outlets, including Milford Daily News and The Information, documented the gridlock and occasional accidents involving Amazon vehicles, including cases where semi-trucks damaged grave markers, signs and fences. Last year, a local man suffered brain injuries and filed a lawsuit against Amazon after a contract driver fell asleep at the wheel and crashed head-on into his vehicle.

Amazon took the rare step of dispatching logistics managers and government affairs staffers, who attended public meetings and pledged to help resolve local concerns. The company even paid for signs instructing drivers to avoid certain streets. But locals say the traffic persists.

Holly Sullivan, Amazon’s head of economic development, said the company doesn’t always get it right when it opens new facilities, but that it seeks to address community concerns. Amazon has added staffers in recent years to engage with residents and policymakers, she said in an interview conducted under the condition that she not be quoted directly.

Jinney Smith, a Milford resident, saw her and her husband’s commute time balloon once they started competing with Amazon traffic. They picked up and moved to Hopkinton, the next town over.

But when the pandemic spurred a surge in online shopping, big rigs and Amazon vans appeared on the streets around her new home, despite the delivery station being miles away. Smith’s daughter learned to recognize Amazon’s logo and the sound its delivery vans make coming up the street before she turned three. The family put up a privacy fence last year to keep her from wandering into the traffic. They’re considering moving again.

“It’s like we can’t escape from it,” Smith said. “We’re like, ‘It’s everywhere. Where can we go? Where can we just not have Amazon?’”

City planners and academics are scrambling to assess the fallout from urban and suburban e-commerce warehouses. Often, traffic is the first and most visible impact, but researchers are trying to figure out what such facilities mean for air quality, neighborhood safety and other quality-of-life measures. A southern California air-quality regulator last year passed a rule requiring large warehouses to mitigate their impact on vehicle emissions.

“People feel like this is just happening to them,” said Anne Goodchild, director of the University of Washington’s Supply Chain Transportation and Logistics Center. “Even city governments are not sure what’s happening. There’s this fear and anxiety around it, and it should be something that communities feel they have a voice in.”

Amazon pitches cities on the hundreds of jobs at delivery stations, typically 150 to 200, and a starting wage of $18 an hour. The company is also up-front with city planners that the facilities generate traffic, Sullivan said. She declined to share the company’s assessment of typical vehicle trips, or delivery stations’ impact on air quality or neighborhood safety.

Despite the beginnings of the local outcry in Milford, Amazon opened a second facility there in 2020. During the building’s first full year of operation, traffic was 57% higher in the neighborhood than pre-pandemic levels, according to StreetLight Data, which analyzes traffic data from mobile devices and other sources.

Delivery stations located in cities from Edwardsville, Illinois to Ocala, Florida and Lubbock, Texas, saw traffic more than triple after Amazon came to town, according to StreetLight, which analyzed warehouse traffic data for Bloomberg.

That increase in traffic doesn’t always generate blowback. Facilities slotted into existing industrial or commercial areas well served by highways can have less noticeable impact than those sited near narrow, residential streets. In Sumner, Washington, a short drive from Amazon’s Seattle headquarters, traffic increased 66% in the vicinity of the company’s first delivery station there, according to StreetLight, adding to wear on the city’s streets. But the facility, tucked into an industrial area of town, hasn’t been very disruptive, city officials say.

In the Dallas suburb of Coppell, Texas, Mayor Wes Mays said he sees “no negatives” to Amazon’s presence, which is clustered near other industrial and logistics businesses on the city’s west side, away from residential neighborhoods.

In cases where Amazon has set up near homes recently, the company has been willing to compromise. When Toledo, Ohio, courted Amazon to occupy a long-shuttered mall site in a residential neighborhood, the company initially proposed building a delivery station with offices that looked out onto the main drag, which would have funneled trucks onto streets used by nearby residents.

At the city’s request, Amazon reversed the layout of the facility, which opened last year. “They went over and above,” said Brandon Selhorst, Toledo’s director of economic development. “They recognized that this was a neighborhood and a commercial corridor that was important to the city.”

In Milford, Bryan Cole, a town planning board member, said there was not much his town could do once some leaders came to regret letting Amazon come to town. “It’s hard to get that toothpaste back in the tube,” he said.
Amazon last month signaled it would slow the pace of new warehouse openings, after a frantic expansion to meet demand during the pandemic left the company overbuilt and overstaffed for a return to normal shopping habits. But some Wall Street analysts say Amazon will quickly soak up the excess warehouse capacity when e-commerce sales, still a small fraction of total U.S. retail spending, start growing again—meaning the nationwide expansion is far from over.
So the Teamsters, alongside allies like the United Food and Commercial Workers, are keeping up the pressure. San Francisco officials earlier this year slapped a moratorium on new last-mile delivery facilities.The bill was written broadly, but with a very specific tenant in mind: Amazon had purchased a former waste management site near downtown and planned to put a three-story delivery station there.
Rabinowitz, joined by unionized UPS workers, testified in support of the bill, which passed unanimously. Amazon said it would pause its San Francisco project, one of at least 11 in the area that the Teamsters say have been suspended or ended after the union helped raise concerns.
Asked about those claims, Amazon’s Sullivan said the Teamsters aren’t determining where the company sets up shop. Amazon tends to evaluate multiple sites in the same region simultaneously and has been reevaluating its capacity recently, she said.
Said Rabinowitz: “People are seeing the reality of what Amazon’s bringing to communities.”