Regionalize and Scale: Amazon’s Fulfillment Network Design for Faster and Cheaper Delivery

Amitabh Sinha (), Jeremy Agte (), Russell Allgor (), Cristiana L. Lara (), Ashish Agiwal (), Semih Atakan (), Lourdes Campo (), Tolga Cezik (), Daniel Chen (), Qi Chen (), Jesse Fischer (), Eitan Gor (), Nader Kabbani, Ryan Kennedy (), Kaushik Krishnan (), Yuan Li (), Shahbaaz Mubeen Mamadapur (), Tanmay Mathur (), Nick McCabe (), David Mildebrath (), Eric Powell (), Andrea Qualizza (), Denton Schroeder (), Nityansh Seth (), Xiaoyan Si (), Kaushik Sinha (), Darren Stegner (), Jun Xiao (), Ling Zhang (), Shanshan Zhang () and Jikai Zou ()
Additional contact information
Amitabh Sinha: Amazon.com, Bellevue, Washington 98004
Jeremy Agte: Amazon.com, Bellevue, Washington 98004
Russell Allgor: Auger.com, Bellevue, Washington 98004
Cristiana L. Lara: Amazon.com, Bellevue, Washington 98004
Ashish Agiwal: Amazon.com, Bellevue, Washington 98004
Semih Atakan: Amazon.com, Bellevue, Washington 98004
Lourdes Campo: Amazon.com, Arlington, Virginia 22202
Tolga Cezik: Amazon.com, Bellevue, Washington 98004
Daniel Chen: Amazon.com, Singapore 018916
Qi Chen: Amazon.com, Bellevue, Washington 98004
Jesse Fischer: Amazon.com, Bellevue, Washington 98004
Eitan Gor: Amazon.com, Bellevue, Washington 98004
Ryan Kennedy: Amazon.com, Bellevue, Washington 98004
Kaushik Krishnan: Amazon.com, Bellevue, Washington 98004
Yuan Li: Amazon.com, Bellevue, Washington 98004
Shahbaaz Mubeen Mamadapur: Amazon.com, Bellevue, Washington 98004
Tanmay Mathur: Blue Origin, Kent, Washington 98032
Nick McCabe: Amazon.com, Tempe, Arizona 85281
David Mildebrath: Amazon.com, Bellevue, Washington 98004
Eric Powell: Cape, Washington, District of Columbia 20003
Andrea Qualizza: Amazon.com, Washington, District of Columbia 20001
Denton Schroeder: Amazon.com, New York, New York 10001
Nityansh Seth: Blue Origin, Kent, Washington 98032
Xiaoyan Si: Amazon.com, Bellevue, Washington 98004
Kaushik Sinha: Amazon.com, Boston, Massachusetts 02210
Darren Stegner: Amazon.com, Bellevue, Washington 98004
Jun Xiao: Amazon.com, Bellevue, Washington 98004
Ling Zhang: Amazon.com, Bellevue, Washington 98004
Shanshan Zhang: Amazon.com, Bellevue, Washington 98004
Jikai Zou: Coupang, Inc., Seattle, Washington 98101

Interfaces, 2026, vol. 56, issue 1, 23-41

Abstract: This paper presents Amazon’s implementation of regionalization, a strategic transformation of its fulfillment network in the United States that partitioned the country into eight interconnected but largely self-sufficient regions to address growing complexity and inefficiencies in order fulfillment. By 2021, Amazon’s unprecedented network growth had led to nonlinear increases in transportation system complexity and suboptimal equilibria that increased costs while reducing delivery speeds. The core principle behind regionalization involves matching demand with capacity through geographical partitioning, moving away from a flexible national network toward a more structured regional approach. The development leveraged extensive operations research methodologies over 1.5 years, encompassing region design, network optimization modeling, inventory-speed trade-off analysis, and significant software and operational changes. Following successful pilot and full network deployment by March 2023, regionalization helped deliver substantial improvements: a 15% reduction in distance between sites and customers, 12% fewer middle-mile touchpoints, increased in-region fulfillment from 62% to 76%, and the first reduction in cost-to-serve per unit since 2018, with over $0.45 per-unit savings in the United States alone while simultaneously improving delivery speeds with over nine billion items delivered the same or next day globally in 2024.

Keywords: Edelman Award; real-time resource allocation; retail operations; transportation network optimization (search for similar items in EconPapers)
Date: 2026
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