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

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.