Amazon Assisting in Stabilizing the Port as Its Local Presence Expands

Port of Long Beach is working with Amazon Web Services (AWS) to share information and increase efficiency for the busy and beleaguered harbor. The port thinks the alliance will help improve its cargo distribution system with supply chain partners to open up the clogged goods movement system that it has been struggling with since the pandemic hit in 2020.

AWS is one of five primary business divisions that make up parent company Amazon.com, Inc. That parent company is one of the largest supply chain companies working closely with the ports of Long Beach and Los Angeles to have its good shipped from overseas sources.

Amazon has been increasing its presence in Long Beach and nearby cities substantially for the past couple of years through its shipping and fulfillment centers and grocery stores.

The harbor alliance was announced May 24 at the AWS Summit in Washington, D.C., an Amazon event that brings together public sector stakeholders to learn more about how cloud computing can deliver innovation and efficiency to government and private industry sectors. The Long Beach-Amazon deal was still in the process of being finalized, according to the announcement.

AWS will support the Port’s Supply Chain Information Highway, the mission of which is to improve visibility and efficiency of cargo movement through the port and out to the supply chain. Registered users in the system will have free access to the data, which they’re encouraged to utilize for planning, scheduling and improving their cargo movement systems.

The port has its work cut out, with little relief in sight. The Container Port Performance Index 2021, a new World Bank study that tracks container port performance, placed the ports of Long Beach and Los Angeles at the very end of the 370 global rankings in its finding released in late May. Booming consumer spending brought in way more maritime traffic beyond than what the ports can efficiently manage. Ships are putting in long waits to unload their cargo units; labor shortages and limited warehouse space have also been factors.

Five Years in the Making

The City of Long Beach previously had been hoping for something much larger: being part of Amazon’s second U.S. headquarters after the company’s announcement in 2017 that it was in the market to do so. Unofficially called “Amazon Coast,” Long Beach had been in partnership with Huntington Beach to create Amazon’s other HQ outside of its home base in Seattle.

Amazon Coast was going to be housed at 14952 Bolsa Chica St. in Huntington Beach, in that city’s growing corporate park. New York and many other cities were also vying for Amazon’s decision, which eventually went to Arlington, Va., in 2019.

If you drive by that address located at the corner of Bolsa Chica St. and Bolsa Ave. in Huntington Beach, you’ll see that Amazon did take hold of the building, which was named DFX9 Last Mile Delivery Station. Oltmans construction company says it recently built the 242,975 square foot warehouse for the Huntington Beach Gateway project for SRG Commercial. The City of Huntington Beach has verified the gateway project on its website, which opened up to these construction projects in 2019.

The City of Long Beach confirmed that it has not been involved in this Amazon location, said Economic Development Department Acting Director Johnny Vallejo.

“Long Beach continues to offer an innovative and supportive climate for businesses from startup entrepreneurs to global headquarters. As the economy evolves in response to the pandemic and consumer expectations, companies like Amazon, along with the countless small businesses they support, are important to the overall economic ecosystem. The City of Long Beach is well-positioned to cultivate our many small businesses, while also providing access to resources and innovation needed by cutting-edge companies,” Vallejo said.

On May 3, Amazon announced it will be launching a greater presence in the southland on the corporate and technology side. The company expects 2,500 new jobs will be added to its Tech Hubs network, spreading from Los Angeles to San Diego, and adding expansions in Santa Monica, Irvine and San Diego. Amazon said the new jobs will be added to its current size of more than 170,000 employees in California.

Amazon jobs range from tech to logistics. Many workers go to the company’s massive fulfillment and delivery centers – warehouses for Amazon online order shipments and other logistics.

Mixed Messages on Working for Amazon

Amazon has been gaining a visible growing presence in the southland economy. The company is bringing more jobs to San Bernardino county, where they’ve been badly needed, and to Riverside, Orange and Los Angeles counties, where the jobs are welcomed by local governments.

Amazon has ramped up its presence in Long Beach over the past couple of years  –  with several Amazon hub counter storage units in place; the Amazon @The Beach fulfillment center; the Amazon Fresh supermarket on Spring near Palo Verde; and a large version of its Whole Foods Markets on Pacific Coast Highway and 2nd St., which was part of that new mall opening in October 2019.

The company says expansion of its California workforce will support Amazon divisions around the country including retail, Amazon Games, AWS and operations. Some of the new jobs announced in May will include software development engineers, game designers, user experience designers and corporate positions in human resources, finance, IT and more.

But the workforce has mixed feelings about working for Amazon, with many of them feeling underpaid and overworked and some of them taking unionization very seriously. In April, the company saw its first unionized U.S. location  –  a Staten Island, NY, warehouse. About 4,700 workers voted with about 520 more of them deciding to go union in the narrow victory for what’s been named Amazon Labor Union. Amazon had been working hard to keep unions away from its workers.

White collar professionals moving up to Seattle and to regional corporate offices, are becoming known for their comments on Amazon being a difficult employer that may not be viable for long-term employment; but putting the employer on your resume looks very good for future job opportunities, one of them told me recently.

Several cities in the Long Beach area are housing significant volumes of Amazon’s package storage and shipping logistics operations. It’s become typical in recent years to see Amazon delivery vans stopping in front of commercial and residential properties for drop-offs. Many of these workers are independent contractors, or they report to delivery service partners (DSPs), independent delivery organizations that help Amazon deliver from its endless supply of packages.

Another part of this logistics infrastructure has been Amazon Flex “gig workers” who may drive their own personal vehicles and are paid much like Uber drivers, based on completion of delivery orders. These drivers can also rent delivery vans for larger Amazon orders.

Amazon would like to keep its labor costs down and many other cost factors affecting its available capital and market valuation, while keeping good workers on as employees. While its stock prices are still in the ether zone – around $2,430 per share lately versus about $3,218 a year ago – it has been an unstable time with an expected economic recession approaching.

Local governments are tipping toward favorable ratings for Amazon, especially as shipping and logistics continue to expand in Long Beach and the greater southland. They would very much like to see Amazon show up to for more leased and purchased land, annual business fees and job creation.

Jon LeSage is a resident of Long Beach and a veteran business media reporter and editor. You can reach him at jtlesage1@yahoo.com.