- Amazon could soon run into problems hiring enough staff for its fulfillment centers.
- “This is becoming a huge huge challenge in the country and quite frankly I think we’re talking about hitting a wall very soon,” an expert says.
- Follow Amazon’s stock price in real-time here.
Amazon‘s plan to dominate virtual shopping could soon hit a very physical limitation, one expert has warned.
Speaking on a conference call with investors, Marc Wulfraat, founder and president of supply chain and logistics consulting firm MWPVL, said Amazon could soon feel the effects of an economy nearing full-employment as it continues to hire up at fulfillment centers across the country.
“We’re talking about adding another 52,000 full-time employees and 35,000 seasons employees in Q4,” Wulfraat said on the call hosted by Jefferies. “The head count tends to rise proportional to sales growth and those numbers are just staggering. That’s a thousand new people per week full time that they have to add in their warehouses and this is becoming a huge huge challenge in the country and quite frankly I think we’re talking about hitting a wall very soon.”
The problems could extend beyond warehouses too, as the company has to move packages to consumers via trains, planes, and trucks. Automated trucks won’t solve the problem either, he says.
“This is a wall that’s happening outside on the road too because the truck driver shortage in America is very acute as well,” he said.
“We see automated trucks very likely for long, open road distances that might go from, say, the Rockies to the Midwest or something like that where you have very few people on the road. But are we going to see automated trucks in inner cities? Absolutely not.”
To make things worse, Amazon isn’t able to turn to a private carrier, despite President Trump’s very public Twitter rants about Amazon supposedly ripping-off the semi-public agency.
“They’ve really banked on the post office right out of the starting gate going back to 2013,” Wulfraat said. “I don’t see any viable alternative right now because the other options, UPS and FedEx, are really struggling to keep with the capacity demand as it is.”
Shares of Amazon are up 23% since the beginning of 2018. The company is expected to report earnings on April 26, when analysts are sure to ask about its financial relationship with the United States Postal Service.