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Why Amazon plans to send a million packages a day out of Temple Terrace

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Amazon is opening its latest distribution center in Temple Terrace. Why is the mega online retailer investing so much in the Tampa Bay area?

TEMPLE TERRACE — Amazon deployment engineer Kaitlyn Ackley tapped a Kindle tablet as robots, shaped like Roomba vacuums, scurried across the warehouse floor behind the metal fence meant to separate human workers from the automated ones.

One of the robots carried a yellow inventory pod up to 13 packages high and brought it to an opening in the gate where Ackley stood.

Ackley is working inside a new Amazon fulfillment center in Temple Terrace to prepare the more than 800 robots, 1,800 pods and other technology for peak holiday shopping season. While the coronavirus pandemic stressed the global supply chain, causing shortages and delays in shipments, Amazon invested in building its own shipping network, said regional director Robert Packett.

The company planned all year for the 2021 holiday shopping season, which is bound to be one of the most taxing on retailers and suppliers yet, given the ongoing manufacturing and shipping constraints. Amazon is working with new and old partners to ensure they can deliver on time this season, Packett said. Part of that strategy is expanding across the U.S., including in Tampa Bay.

“We’re closer to the customer right here in Temple Terrace,” said Packett.

Amazon isn’t the only one — retailers across the brick and mortar and e-commerce spectrum are in a mad dash to build and open distribution centers across the U.S., in order to keep up with the demand of delivery accelerated by the pandemic. The biggest challenge ahead of them, experts say, may be finding the appropriate real estate, with some warehouse needs spanning the size of several football fields under one roof. That kind of footprint comes with a sizable price tag, even in communities just outside of major metro areas.

The Temple Terrace warehouse will be Amazon’s most technologically-advanced fulfillment center when it opens, company spokesman Owen Torres said. Amazon officials did not say when the Temple Terrace fulfillment center will officially be operational.

The new Temple Terrace center joins Ruskin, Lakeland and Auburndale in the Central Florida area. Amazon also recently announced two more in Tallahassee and Port St. Lucie, plus five new delivery stations coming to Florida in 2022, including one in Pinellas Park.

While the bins in the pod were empty for a demonstration on Sept. 30, they’ll soon help Amazon ship up to one million packages a day at this one location.

In addition to carrying pods of packages, Ackley said the “drive robots” can work independently to inspect floors, scan QR codes, detect when humans are nearby or respond to a touch of a button if an Amazon employee needs it to do a specific task.

“They’re constantly working 24/7,” Ackley said. “They never take a break.”

E-commerce sales were already booming before the pandemic, said Ryan Vaught, executive managing director of industrial services at Colliers International, but online shopping reached new heights during this time. This forced retailers to race against each other to build a network wide enough to offer quick delivery.

“There’s a huge push from a select group of names like Amazon, Home Depot and Lowe’s trying to get as close to population centers as possible,” Vaught said.

More than a decade ago, Atlanta was the main distribution region supplying Florida and Tampa Bay. Because the state is surrounded by water, Vaught said it’s historically been a difficult area for retailers to serve. But as Florida’s population continues to grow, he said retailers have shifted to developing a centralized distribution base around the Interstate 4 corridor.

In 2017, Walmart opened an e-commerce distribution center in Polk County, which employs nearly 1,000 workers. The next year, the retailer opened another center in Cocoa. Port Tampa Bay opened a cold storage facility for grocery goods in 2017, with easy access to Central Florida highways for transportation. Amazon has invested in other areas too — including a $100 million commitment in a Lakeland air cargo facility.

All this is only the beginning for the local e-commerce boom, Vaught said.

With more interest in distribution hubs in Central Florida, Vaught said the next problem retailers will face is finding enough commercial real estate to fit their needs. The key is finding space easily accessible to Florida’s highway network.

“Finding large land sites in urban areas within the Tampa Bay area is becoming almost impossible,” said Vaught, who has worked with several development and retail companies to build their supply-chain network in the Tampa Bay area.

While real estate is expensive, many retailers are willing to pay top dollar for easy access to land because transportation is one of their biggest costs.

The new Amazon fulfillment center is close to both interstates 75 and 4. And it’s a win for the city of Temple Terrace, Mayor Andy Ross said. Amazon officials said the 465,000-square-foot warehouse will bring in about 1,000 full-time jobs starting at $15 an hour. The mayor said he hopes the new workers will move to the area and shop at local businesses.

“This is certainly a big part of our success recently,” Ross said before touring the new warehouse last week. “We intend to capitalize on this.”

Having an Amazon distribution center in town isn’t going increase sales just because they’re in the back yard, said Nikki Phillips, a managing broker and vice president of real estate firm Smith and Associates. It’s the other way around — distribution centers come because people are already ordering.

”Temple Terrace has been having a very deliberate and organized effort to refashion their corridor to the response of the residents,” Phillipssaid.

For example, the city’s redevelopment agency worked with the Richman Group of Florida to build a 200-unit complex with luxury apartments, plus several retail and dining destinations to revitalize the city’s downtown.

“These increases in more retail and job opportunities will bring more individuals to the area,” she said.

By: BERNADETTE BERDYCHOWSKI - Real Estate and Retail Reporter | Tampa Bay Times


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Ryan Vaught

Executive Managing Director, Industrial Services

Tampa

Ryan Vaught joined Colliers in 2018. His real estate practice focuses on consulting with industrial developers and investors throughout the country.


Prior to joining Colliers, Ryan was a Senior Vice President with JLL where he led the industrial services platform in Tampa, FL. Before relocating to Florida, Ryan was with Brixton Capital, a private equity investment firm located in San Diego, CA. 


Ryan also served in the United States Army as a military intelligence officer.

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