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Amazon showcases new fulfillment center in Houston

September 7, 2018

Orange robots weave around the warehouse floor in a synchronized dance, twirling tall stacks of goods from smartphone cases to T-Rex toys.

As online orders flash on computer screens, an army of workers pick and place items from the robot’s shelves into yellow plastic bins that zip around a marathon-long maze of fast-moving conveyor belts inside Amazon’s fulfillment center in north Houston. The 855,000-square-foot facility -- roughly the size of 14 football fields -- processes hundreds of thousands of packages a day to be shipped to customers around the world.

“What once took hours to fulfill, we can now do in a matter of minutes,” general manager Sarah Smith said on a media tour Thursday. “These robots have created tremendous efficiencies.”

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Amazon’s latest Kiva robots, which can fetch small items faster than humans and allows the company to store more product in its warehouses, will be on full display Friday as the e-commerce giant throws a grand opening ceremony for its first major fulfillment center in the Houston area and one of nine operating in Texas. The four-story facility actually began operations in July 2017, but Hurricane Harvey’s devastating floods delayed plans for the public unveiling until now.

Amazon’s new $136 million fulfillment center represents the online retailer’s ongoing efforts to improve its last-mile delivery service, ever shortening the time it takes from computer click to doorbell ring.

Until this new facility opened, Amazon orders in Houston were largely handled by fulfillment centers in Dallas and Schertz near San Antonio, said Rusty Tamlyn, senior managing director for HFF, a local commercial real estate firm.

“When Amazon went to same-day deliveries, they realized they’ve got to be closer,” Tamlyn said. “Logically, you can’t get here quickly enough from Dallas.”

Amazon, which earlier this week became the second American company to hit the $1 trillion valuation mark, received a 10-year tax break from Harris County commissioners to develop its north Houston facility. The tax break is expected to save the company nearly $180,000 annually.

Amazon employs 3,500 workers in the Houston area. Nationally, the average Amazon worker makes $15 an hour, including stock and bonuses.

Amazon earlier this year opened its second fulfillment center in the Houston area to meet the demands of the region’s growing population and appetite for online shopping. The one-million-square-foot facility in Brookshire, west of Katy, will process larger products, such as music equipment, sports gear and electronics. The company also has a 300,000-square-foot sorting facility near George Bush Intercontinental Airport.

Amazon may consider opening additional fulfillment centers in the Houston area, should customer demand require it, Smith said. Tamlyn said he wouldn’t be surprised if Amazon develops a third fulfillment center in the southwest Houston area.

The growing demand for e-commerce distribution centers comes as several longtime brick-and-mortar retailers are shuttering stores and slashing jobs. The Toys R Us bankruptcy earlier this year claimed 18 stores in the Houston area. Sears recently announced it will close its longtime store at Memorial City Mall after closing six local stores over the past decade.

“Retail’s pain has been industrial’s gain,” Tamlyn said. “A lot of these retailers are not adding physical stores. They’re looking to get more efficient.”

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Amazon, too, is striving to become more efficient. It’s north Houston fulfillment center hums 24 hours a day, seven days a week. Some 1,500 employees and hundreds of Kiva robots, which can hold 750 pounds of product and move 5 feet per second, work around the clock to pick, package, label, sort and ship hundreds of thousands of packages a day.

Despite Amazon’s reliance on robots, Smith said the company still relies heavily on its human employees for quality control and customer service. Earlier this summer, Smith found out that an Amazon package failed to arrive at a Pearland customer’s home. The order contained several dozen rosaries intended for the funeral of the customer’s mother the following day.

Amazon’s north Houston fulfillment center didn’t have any rosaries, but Dallas’ facility did. Smith dispatched one of her associates to meet their Dallas counterpart at a burger joint in Fairfield, Texas. The rosaries were delivered by midnight, albeit late, but in time for the funeral.

paul.takahashi@chron.com

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