LANCASTER — Walmart is building a huge facility about 25 miles south of Dallas with big promises for e-commerce shoppers.
The nation’s largest retailer on Tuesday opened a three-story, 1.5 million-square-foot automated fulfillment center in Lancaster that has been under construction for two years. This is a fulfillment center that Walmart, which for years has watched Amazon flourish by leveraging robots and technology to become a jack-of-all-trades, can be proud of.
Why should Walmart customers care?
“We’re going to get products to them faster,” said Josh Lamping, general manager of the fulfillment center at 2500 East Beltline Road in Lancaster. The facility will be able to process twice as many orders as Walmart’s other fulfillment centers and will be able to “ship hundreds of thousands of orders per day.”
It is one of five being built in the U.S., and when combined with Walmart’s traditional delivery network, which includes 4,700 stores, it can deliver packages to 95% of U.S. customers within the next to two days. said Walmart.
Walmart is building capabilities to compete more directly with Amazon. The company dominates online shopping in the US with an estimated 40% market share to Walmart’s 7%. Although Walmart has the lead in online grocery shopping, it lags behind Amazon in terms of online share of general merchandise sales.
The Lancaster facility is designed to pick up and ship products from third-party sellers, which Amazon is using to expand its selection and create a lucrative new revenue stream for itself. .
Walmart pays some of the highest hourly wages in North Texas, with facility workers averaging $23 an hour.
Lamping said the company has hired about 500 of the 1,000 full-time employees it plans to hire at the facility by the 2024 holiday season. About half of the hires so far have come from other Walmart jobs, including stores, the company said.
Walmart also promised to create better warehouse environments. The automated process has reduced “touches to the product” from 12 to five, Lamping said.
The building is designed to provide a short distance to one of the six break rooms and the parking lot. All products are stored at the back of the horizontal building, and purchased products are retrieved by an automated system. People are working along the front of the building. The packaging station platform allows workers to adjust the height. A shipping box arrives at the packer that is the perfect size for the product destined for the customer.
There is no bubble wrap anywhere in the building.
This facility stores and ships millions of items that fit into one of those totes that move around to pick up the items and deliver them to the packers. Think about items the size of toys or small kitchen appliances or smaller, Lamping says. “Ride-on lawn mowers and refrigerators are prohibited.”
Walmart’s other fulfillment centers have size 18 boxes, which seems like enough, but that wasn’t the case, Lamping said. “We have reduced packaging materials by 60%.”
The new facility is equipped with machines that create custom cardboard boxes when shoppers order them. A sheet of cardboard goes in from one end and the finished box comes out the other end. Opened boxes continue to join their contents at the packing station. The box then moves along a belt and is inspected by another person until it is taped and labeled by yet another machine. The sealed boxes are loaded through a chute onto a truck and delivered to the shipper.
Walmart Chief Financial Officer John David Rainey told analysts in August that the new automated distribution and fulfillment centers were “30% more efficient per hour than non-automated buildings.” I’m doing it,” he said.
Walmart is building an automated grocery distribution center that is expected to open next year and serve 150 stores in the region. The 730,000-square-foot building is located next to a fulfillment center on 162 acres at the southwest corner of East Pleasant Run and Cornell Road.
More than 15% of stores now offer automated regional logistics, which has also increased productivity, Rainey said. So expect him to see fewer empty grocery shelves at D-FW Walmart over the next year.
Walmart announced last week that it will build its fifth new-generation fulfillment center in Stockton, California, in 2026. Two other locations are opening in Joliet, Illinois and McCordsville, Indiana, and one in Greencastle, Pennsylvania is scheduled to open next year.
Walmart invested $800 million to purchase more than 450 acres of land and build two automated facilities.
The City of Lancaster has approved a 15-year property tax exemption of up to 65% and a five-year sales tax rebate for both facilities. Lancaster also estimated that the facility would generate $2.3 million in tax revenue annually and more than $34 million over 15 years.
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