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Amazon’s AI Bill Accelerates, but Its Cost to Deliver Each Order Keeps Shrinking

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Amazon’s AI Bill Accelerates, but Its Cost to Deliver Each Order Keeps Shrinking

As Amazon‘s AI infrastructure spending skyrockets, it has gotten cheaper for the tech titan to fulfill and deliver each customer order for a fourth straight year.

Despite wading through higher transportation costs from fuel inflation and higher line-haul trucking rates, Amazon lowered its overall “cost to serve” in the third quarter, with chief financial officer Brian Olsavsky attributing the improvement to better inventory placement, shorter shipping distances and package consolidation.

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Shipping costs increased 11 percent year-over-year to $28.3 billion versus a 12 percent increase in units sold. Excluding the fuel and line-haul inflation, shipping costs grew 8 percent.

The worldwide shipping cost growth decelerated significantly from the prior two quarters, which saw 14 percent and 19 percent growth, respectively.

The efficiency is paying off as Amazon further pushes the limit on fast delivery. The number of items ordered through its “ultra-fast” 30-minutes-or-less Amazon Now delivery service is up at a tenfold rate since the pilots for the program were first introduced late last year. That program is now available in more than 450 towns and cities, the company says.

In Amazon’s earnings call late Thursday, CEO Andy Jassy highlighted the growth of the company’s online stores, which are still the Big Tech firm’s top revenue driver.

“I think some folks are sleeping a bit on how much progress that business has made and what it’s become the last few years,” said Jassy.


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