Mapping Amazon

Amazon Warehouses

Amazon Facilities

Highway Access

Subsidies for Amazon: Necessary or Wasted?

The median household disposable income in this 20-minute drive-time area is $60,438, which is considerably higher than the $45,284 nationwide.

Business Basics: Proximity to Highway Infrastructure

State and local governments in the United States have already awarded almost <a href="https://www.goodjobsfirst.org/amazon" rel="noopener noreferrer" target="_blank">$3 billion</a> (and more that is hidden) in economic development subsidies to Amazon. While some of those subsidies, including its controversial HQ2 deal in Northern Virginia, are for white-collar offices or for cloud-computing data centers, by far the greatest number of deals have been awarded to the company for its warehouses - particularly the so-called fulfillment centers.

Meanwhile, Amazon’s online sale surge as Americans stay home. Isn’t it time that taxpayer dollars were saved for true public necessities?

The massive subsidies state and local governments have given Amazon for these warehouses have been wasted - because the evolution of the Prime business model, to rapid delivery, required Amazon to build them.

Same thing here for Monee, Illinois: Two fulfillment centers are one minute away from Interstate 57. Will County, the southwestern part of the Chicago metropolitan area, is a massive rail and highway crossroads with one of the largest concentrations of warehousing in the country.&nbsp;

Before the coronavirus pandemic, communities like Monee and Fresno and Baltimore already had dire financial needs: for affordable housing, better schools and better health care. Now with the economic depression caused by the pandemic, these communities face catastrophic losses in tax revenue and soaring public health care and public safety expenses.

Tax Avoidance Collides with Rapid Delivery

Locations of cargo airports: Federal Aviation Administration. Passenger Boarding (Enplanement) and All-Cargo Data for U.S. Airports. <a href="https://www.faa.gov/airports/planning_capacity/passenger_allcargo_stats/passenger/" rel="noopener noreferrer" target="_blank">Link</a>.

(Image credit: <a href="https://www.shutterstock.com/g/blvdone" rel="noopener noreferrer" target="_blank">blvdone</a>)

This map overlays Amazon facilities (red) with county-level median household disposable income – that is, a household's ability to make discretionary purchases. It is clear that the facilities are concentrated in wealthier counties.

Interactive: Click on a facility or a county for more details.

Institute for Local Self-Reliance: <a href="https://ilsr.org/amazon-3/" rel="noopener noreferrer" target="_blank">Amazon Page</a>

You can see by the time stamp in the video that the number of facilities grows very slowly in the company’s early years, then really accelerates starting in 2012. Why did Amazon go on a warehouse-building spree starting in 2012?

Formerly the site of a General Motors assembly plant, this warehouse has everything Amazon needs -- easy access to highway, railway, port, and airport, close to Baltimore's gentrifying central and east side neighborhoods. Even though the location has all the business basics, Amazon pushed for (and got) about $45 million in subsidies from state and local governments under programs such as enterprise zone tax breaks, job creation tax credits, and energy rebates from Baltimore Gas and Electric Company.

Median household disposable income and Prime subscriptions: Esri. Esri Demographics. <a href="https://www.esri.com/en-us/arcgis/products/data-location-services/data/demographics" rel="noopener noreferrer" target="_blank">Link</a>.

As an <a href="https://bizjournals.com/seattle/news/2017/10/11/amazon-public-subsidies-incentives-tax-breaks.html" rel="noopener noreferrer" target="_blank">article</a> from Puget Sound Business Journal summarized:

Interactive: Click on a census tract to see its demographic info. Note: Colors outside the highlighted area have been dimmed and may not appear exactly like the legend below.

“Amazon has perfected this formula - enter quietly, move fast, pit sites against each other - and used it to elicit more than $1.24 billion in subsidies from state and local governments to help build out a massive U.S. fulfillment and delivery network. Dozens of cities across the country report similar stories of secret, high-pressure negotiations.”

Goods move by a mix of truck, rail and air. But as Amazon promises to make more of its deliveries in fewer days, more goods need to move by air. In 2015, the company launched Amazon Air and by 2021, it expects to have 70 cargo aircraft landing at 20 airports.

Quote #2: Amazon Press Release. "Amazon Fulfillment Center to Open in Fresno, California." (June 2017) <a href="https://press.aboutamazon.com/news-releases/news-release-details/amazon-fulfillment-center-open-fresno-california" rel="noopener noreferrer" target="_blank">Link</a>. Accessed: April 8, 2020.

(Image credit: <a href="https://www.shutterstock.com/g/chalabala" rel="noopener noreferrer" target="_blank">Jaromir Chalabala</a>)

Interactive: Click on a county to see its demographic info. Zoom in and out using the + and - at the top-left corner.

Quote #1: Salt Like Tribune. 2017. "Did Utah need to offer $5.6 million to get Amazon jobs?" (July 2017) <a href="https://archive.sltrib.com/article.php?id=5448764&amp;itype=CMSID" rel="noopener noreferrer" target="_blank">Link</a>. Accessed: April 16, 2020.

Here you can see Amazon facilities (red) in relation to highways across the U.S (gold). The color gradient from light to dark emanating from highways represent areas within 1, 3, 5, and 10 minutes from highway ramps and exits. It is clear that most, if not all, Amazon facilities are within 10 minutes of drive time to highways - everywhere in the country.

Amazon subsidy data: Good Jobs First. Amazon Tracker. <a href="https://www.goodjobsfirst.org/amazon-tracker" rel="noopener noreferrer" target="_blank">Link</a>.

Highway access: Esri. Living Atlas. <a href="https://livingatlas.arcgis.com/en/" rel="noopener noreferrer" target="_blank">Link</a>.

This map shows areas within 20 minutes by truck from Amazon facilities (red) over median household disposable income for the census tracts in the Philadelphia region. The drive-shed, delineated by red border, covers many wealthy neighborhoods. You can also see here that the warehouses tend to cluster around arterial highways through major cities.

(Image credit: <a href="https://www.shutterstock.com/g/BiancoBlue85" rel="noopener noreferrer" target="_blank">Blue Planet Studio</a>)

Governments have been using large subsidy packages to induce Amazon to locate warehouses their localities. Each deal is touted as an achievement. But is it really the tax incentives that got the warehouse there? Or is it like what Marc Wulfraat - founder and president of the logistics consulting company MWPVL International Inc. - <a href="https://archive.sltrib.com/article.php?id=5448764&amp;itype=CMSID" rel="noopener noreferrer" target="_blank">said</a>:

Interactive: This map is zoomed into the Northeast by default. Drag with your mouse to view different parts of the country, or click on one of the buttons below:

Locations of Amazon facilities: MWPVL International Inc. Amazon Global Supply Chain and Fulfillment Center Network. <a href="https://mwpvl.com/html/amazon_com.html" rel="noopener noreferrer" target="_blank">Link</a>.

The <a href="https://athenaforall.org/" rel="noopener noreferrer" target="_blank">Athena</a> Coalition

"It doesn't make sense for the government to hand out tax incentives, because if Amazon wants to be there, they're going to be there, period."

Quote #3: Team Kentucky. "Ready for Prime Time." (2017) <a href="https://siteselection.com/cc/kentucky/2017/cover-story.cfm" rel="noopener noreferrer" target="_blank">Link</a>. Accessed: April 16, 2020.

Quote #4: Puget Sound Business Journal. "The Amazon Effect: How Big Incentives Can Lure a Giant." (October 2017) <a href="https://www.bizjournals.com/seattle/news/2017/10/11/amazon-public-subsidies-incentives-tax-breaks.html" rel="noopener noreferrer" target="_blank">Link</a>. Accessed: April 8, 2020.

To execute rapid delivery, Amazon couldn’t get away with only a handful of warehouses. It had to locate warehouses in many markets where the greatest number of Prime households are located. But when it created a physical presence in states with sales tax, it meant it had “nexus” there. That meant the states could start requiring Amazon to collect sales tax.&nbsp;

Good Jobs First gratefully acknowledges general support for our work from the following foundations: the Bauman Foundation, the Reva &amp; David Logan Foundation, the Stephen M. Silberstein Foundation, and the Surdna Foundation.

Satellite image from Charlotte, North Carolina: An internal distribution center, delivery station, and yet-to-be-built warehouse are close to Interstate 485 and the Charlotte Douglas International Airport.

"There are several factors we consider when deciding on where to place a new fulfillment center. Most importantly, we look to see where we can improve Prime benefits with faster shipping speeds for customers..."

... And Yet Politicians Keep Subsidizing Amazon's Warehouse Network

Amazon resisted as long as it could, sometimes flouting nexus and even running up a tab of $269 million in uncollected taxes in Texas. But then it veered into subsidy-grabbing mode. Unable to avoid the inevitable (by 2017, Amazon would be collecting sales tax, at least on its own sales, in every state with a sales tax), the company created a tax-break office in 2012 and started insisting that its new warehouses be subsidized. With its famous name and #1 consumer popularity, what mayor or governor could say no?

Here we have areas within 20 minutes by truck from select Amazon facilities (red) over the number of households with Prime subscriptions for the census tracts in the Los Angeles region. This 2,518 square mile area, delineated by red border, has over 300,000 Prime households, in addition to the many businesses in city centers that also rely on Amazon rapid delivery.

As these maps document, Amazon follows a highly predictable pattern in locating its distribution facilities. It needs to have hundreds of warehouses in metro areas where the greatest number of Prime subscribers live. And it locates them near highways and airports with quick access to affluent Prime neighborhoods.

Highways are the veins and arteries of Amazon's rapid-delivery system. The images that follow will show that all facilities are located within minutes of highway ramps.

This map shows an overlay of Amazon facilities (red) over the estimated number of households with Amazon Prime subscriptions at the county level. Not only do the warehouses overlap with Prime households, they both also correspond to the wealthier metropolitan areas.

Many Amazon warehouses (red) are already located near major airports (blue). Proximity calculation shows that the average truck distance from an Amazon facility to the nearest major cargo airport is 21 miles, and the average truck time is 34 minutes.

All photographs are courtesy of Shutterstock. Cover photo by <a href="https://www.shutterstock.com/g/fld" rel="noopener noreferrer" target="_blank">Frederic Legrand - COMEO</a>.

In its earliest years (Amazon launched in 1994), Amazon had very few warehouses. They were intentionally located so that Amazon could legally avoid the requirement to collect sales taxes in most states. That gave Amazon a price advantage, especially on big ticket items as it moved beyond books into electronics and other consumer goods. But by 2012, Amazon’s Prime subscription business model was taking hold and the company prepared to make rapid delivery a critical part of its brand. First came two-day, and later one-day and eventually same-day delivery in many markets.

Interactive: Click on a facility to see more details. Mouse over the list icon in the bottom left corner to see the legend. Use the magnifying glass at the top left corner to search for a location.

According to the latest data, there are <a href="https://mwpvl.com/html/amazon_com.html" rel="noopener noreferrer" target="_blank">about 500 facilities</a> in Amazon's U.S. distribution network. In the map below, the different colors represent different types of warehouses: In addition to the 208 fulfillment centers for packing and 167 delivery station networks for distributing, there are dozens of Prime Now hubs processing 2-hour and same-day deliveries and regional sortation centers where customer orders are assigned routes according to their destinations, plus 10 airport hubs for deliveries by air and 11 inbound cross docks for deliveries by water. About 120 of these facilities are known to have been subsidized with incentives such as property tax abatements, sales tax rebates, income tax credits, land discounts, etc.

The company’s aggressive behavior seeking tax breaks and subsidy deals took off in 2012, when it hired a veteran incentives consultant and created an office within its public policy department to specialize in getting “corporate welfare.” Before 2012, Amazon had not received more than three awards per year; since 2012, it has averaged 19 per year.&nbsp;

First, let's take a look at just how much the Amazon distribution network has grown over the years:

Where the Online Giant Locates Its Warehouses and Why

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The maps that follow show overlays of Amazon warehouses over median disposable household income and the estimated number of Prime households.

This 855,000 square-foot warehouse center near Birmingham is about 2.5 miles from Highway I-20. Logistics experts have considered this area to be optimally positioned for Amazon operations. Nevertheless, the state, city, and county awarded Amazon $54.6 million in subsidies.&nbsp;

Amazon's Burgeoning Infrastructure 1997-2021

“Amazon advised of several factors important to them, including site availability and infrastructure. CVG [has] more than 7,500 acres of property, four runways and plenty of taxiways... and access to three major highways and an ability to access a large population..."

These are the <a href="https://siteselection.com/cc/kentucky/2017/cover-story.cfm" rel="noopener noreferrer" target="_blank">words</a> from Candace S. McGraw, CEO of the CVG (Cincinnati International) airport. As with highways, proximity to large airports with cargo transport is critical to Amazon's operations. We mapped the 132 largest airport by landed cargo weight in 2018 and calculated the time and distance from an Amazon facility to the nearest major cargo airport by truck.

Interactive: Click on a facility or a census tract for more details. Note: Colors outside the highlighted area have been dimmed and may not appear exactly like the legend below.

This satellite image from Coppell, Texas confirms what the map shows. A cluster of Amazon facilities are served by Highway 121 within a 5-minute drive in this Dallas suburb.

Good Jobs First <a href="https://www.goodjobsfirst.org/amazon" rel="noopener noreferrer" target="_blank">Amazon Tracker</a>

The three facilities shown here are located in an "industrial triangle", with easy access to the California’s Central Valley region via three major highways. The warehouse is less than a mile from a highway entrance and 15 -minutes from the nearest airport. Nevertheless, Fresno approved up to $30 million in tax rebates and discounts for Amazon. That's 30 years of sales tax revenue plus a 90 percent property tax abatement lost to one of California’s neediest cities.&nbsp;

Business Basics: Proximity to Air Cargo Infrastructure

This <a href="https://press.aboutamazon.com/news-releases/news-release-details/amazon-fulfillment-center-open-fresno-california" rel="noopener noreferrer" target="_blank">quote</a>, from Amazon's vice president of North American operations, says it all: Amazon, like any consumer goods company, needs to be close to its most-frequent customers. This means warehouses need to be close to affluent neighborhoods with the greatest concentrations of Prime households.&nbsp;

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Interactive: Click on each red pin to see the time and distance of that Amazon facility to the nearest airport by truck. Click on each blue star to see more details about the airport.