Amazon’s project to build a large logistics hub in Newark, New Jersey has been terminated.
The facility was being developed in partnership with the Port of New York and New Jersey, with plans to spend US$125m on a facility within Newark airport to sort and handle both air and land consignments. There were intentions to make further investments in the site after the opening of the core air logistics centre, with the implication that Newark would become a key location for Amazon in the North East of the US and possibly to handle trans-Atlantic consignments.
On July 7th Huntley Lawrence from the Port Authority of New York and New Jersey stated that “the Port Authority and Amazon have been unable to reach an agreement on final lease terms and mutually concluded that further negotiations will not resolve the outstanding issues. The growth of air cargo and the redevelopment of airport facilities in a manner that benefits the region as well as the local community remain a top priority of the Port Authority. Moving forward, the Agency will examine options and determine the best future utilization of these cargo facilities.”
The reasons cited in the local press for Amazon abandoning the Newark project are political. A variety of local lobby groups asserted that the project would cause pollution in the area whilst politicians pressured Amazon to recognise trade unions at the site, something Amazon has always been sensitive about. Amazon has made no statement about the termination of the project.
However, the background to the decision may be another example of Amazon drawing back on the investment in new logistics capability. The internet giant has suffered from a fall in e-retail volumes over the past few months and this triggered a moderation in the level of investment in logistics infrastructure. Yet unless internet retail volumes cease growing, Amazon will need to develop a facility such as that at Newark. The question is, where will that be.
Source: Transport Intelligence, 14th July 2022
Author: Thomas Cullen
GLOBAL SUPPLY CHAIN INTELLIGENCE (GSCi)