Latin America Becomes the Center of Amazon’s Largest Last-Mile Delivery

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Amazon established its biggest last-mile delivery center and inaugurated the warehouse on Thursday in Mexico City. The e-commerce giant aims to provide fast deliveries in one of Latin America’s most densely populated cities.

After launching in Mexico in 2015 and investing 52 billion pesos (around $3 billion) in expanding its consumer base to Latin America’s second-biggest economy, Amazon moved ahead of its competitors, such as the Argentian e-commerce platform Mercado Libre and the American multinational retail corporation Walmart.

The warehouse in Mexico City spans 30,000 square meters and will offer quick deliveries to over 8.8 million people in the region. The site’s surrounding area comprises 22 million people, earning Mexico City the title of one of the most prominent urban centers in Latin America and Amazon’s largest delivery center specializing in last-mile deliveries.

Amazon also runs even more giant warehouses called ‘fulfillment centers’ that sprawl across 92,900 square meters. Overall, Amazon manages forty warehouses throughout Mexico, with a workforce of 8,000 people working directly and 32,000 working indirectly. However, the company did not announce a precise figure regarding the new warehouse’s investment or workforce size.

Amazon’s move to establish its largest last-mile delivery center in Mexico City is part of its strategy to bring and operate distribution centers close to consumers.

During an event in the warehouse, US Ambassador Ken Salazar applauded Amazon for opening job opportunities in Mexico, including the country’s southern regions that experience development and financial constraints. “There’s no corner forgotten for Amazon … It’s wherever you look in Mexico,” he added.

Entrepreneurs and venture capitalists globally have increased their investments in last-mile deliveries in the last five years, but Latin America was behind the race. Out of the $11 billion global investments in last-mile deliveries over the past decade, only $1 billion went to Latin American initiatives and businesses.

Founded by Jeff Bezos in 1994 in the US, Amazon has become one of the world’s largest and most popular e-commerce retailers. Despite having started as an online bookstore, it rapidly gained momentum and expanded into other operations.

However, while the warehouse will spread to every corner of Mexico City, Amazon has received criticism for its last significant establishment in the country.

Amazon inaugurated a $21 million ‘state-of-the-art warehouse’ in Tijuana in mid-2021. The establishment was located in a largely underdeveloped and impoverished region near the US border, next to a housing settlement.

The following years witnessed the facility receiving severe criticism for failing to honor its promise of helping the local community and breaking pledges to employ people from slum areas. Rest of World released a report showcasing low pay wages and rates. Allegedly, the Nueva Esperanza distribution center workers were being paid just $2.60 hourly.

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