Amazon Pours $4B into Rural Delivery Network to Accelerate Same-Day Reach

Yahoo

7 hours ago

Amazon's $4 billion investment in its rural delivery network is expected to expand the e-commerce giant's same-day and next-day delivery capabilities to more than 4,000 smaller cities, towns and communities and 'tens of millions' of customers by the end of 2025.
According to a company press release, Amazon has already begun offering free same-day and next-day delivery in more than 1,000 rural towns and communities. The tech titan says customers in these areas are shopping online at Amazon more frequently and purchasing household essentials at 'meaningfully higher' rates.
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Of the top 50 repurchased items for same-day delivery in these areas, over 90 percent are Amazon's 'Everyday Essentials' products. In the first quarter, the company said the category grew twice as fast as all other U.S. categories due to the faster delivery speeds.
Never one to downplay its delivery capabilities, Amazon touted a 30 percent increase in items delivered same- or next-day compared to the same period in 2024. Amazon Prime members have access to unlimited free same-day delivery when spending over $25 at checkout.
When the investment was first revealed in late April, Amazon expected to expand its network's rural footprint to more than 200 delivery stations by the end of 2026 and create over 100,000 new jobs. These stations are smaller, local distribution centers strategically positioned for last-mile delivery. The buildout would triple the company's rural network and enable the delivery of 1 billion more packages annually, Amazon has said.
Across the U.S., Amazon had 595 package delivery stations already active in the 2025 first quarter, with an estimated 104 expected to be built according to supply chain consulting firm MWPVL International.
In a Tuesday blog post, the company included a video showcasing operations at what it calls an RSR+ (Rural Super Rural Plus) site in Dubuque, Iowa, which opened in January 2022. That location namely carries household essentials items that can be easily shipped same-day or overnight, said Doug Herrington, CEO of Worldwide Amazon Stores.
To build out the network, Amazon is transforming existing rural delivery stations into 'hybrid hubs' that can store inventory on site to enable delivery within hours and prepare packages for final delivery to customers. This approach is designed to maximize existing rural infrastructure to position products closer to customers' doorsteps and reduce transportation distances.
In line with its wider regionalized fulfillment strategy across the U.S., Amazon is using advanced machine learning algorithms to predict which items will resonate with local Prime members based on their unique needs.
This includes stocking a mix of popular and frequently purchased items like wireless headphones, coffee pods, crackers, paper towels and diapers, as well as products curated to fit local preferences.
Although Amazon is pushing its machine learning capabilities, the company did not reveal the extent of robotics deployments across the rural delivery stations.
Amazon's push is opportune, capitalizing on changes implemented at the U.S. Postal Service (USPS), which altered some service levels that may impact rural areas.
As of April 1, volume originating in post offices more than 50 miles from USPS processing facilities would take an extra day in transit due to changing timing of transportation.
'We do not anticipate that individual rural customers will experience a significant impact from these adjustments, and in fact are likely to notice positive impacts,' the USPS said in a fact sheet updated April 25. 'The delivery process in rural communities is not changing. Customers, regardless of where they live, will still receive delivery six and sometimes seven days per week.'
Amazon's announcement also comes just weeks before its annual Prime Day event, which has been expanded this year to four full days, further putting the company's supply chain under more stress. Prime Day is set to take place from July 8-11.
The move also comes briefly after Amazon confirmed it was ending its pilot test where its delivery service partners (DSPs) would conduct same-day deliveries for the company.
Amazon contract delivery firms in several U.S. states like Florida, Illinois, Massachusetts, Ohio, Texas and Washington deployed drivers for four- or five-hours shifts in Kia Souls. The program's vehicles were rentals and will be returned to vendors as the program subsides.
The program, which started its rollout in 2023, will wind down over the next few months. With the test's conclusion, Amazon is expected to rely more on Amazon Flex gig workers, who would pick up the affected routes. Flex drivers use their own cars to pick up and deliver goods.
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