HONOLULU — The world’s largest online retailer is about to open its own ground transportation operation for package delivery on O‘ahu.
Amazon held a blessing ceremony Wednesday for a new $300 million distribution center in Kalihi Kai that is scheduled to open Tuesday and gradually ramp up operations over a couple of months to distribute an expected 300,000 to 400,000 packages weekly across the island in company-branded vans.
The new facility will enable Amazon to rely less on UPS, FedEx and the U.S. Postal Service to transport packages to customers from an Amazon Air cargo hub at Daniel K. Inouye International Airport established in 2018, and to reduce overall delivery times.
“At Amazon, we’re always striving to figure out how we can get packages to our customers faster in a more efficient way,” said John Tagawa, the company’s vice president of operations for North America, who grew up in Aiea.
Company officials said the new facility is intended to help get delivery times down closer to two days. Tagawa said 60 percent of packages for O‘ahu customers are currently delivered in under three days.
The new facility that Amazon built is nearly 600,000 square feet, or about four times as big as the Costco store in Iwilei, and is filled with conveyor belts, scanners, sorting bins, carts and other equipment where about 500 employees will be needed to run the operation 24 hours every day.
Outside the facility, Amazon-branded vans operated by several independent contractors who have their own employee drivers and lease the vans from Amazon, will take packages brought via trailer from the airport hub and then take them to customer doorsteps after sorting is done inside the facility.
The new ground transportation facility also is expected to provide job opportunities later for individual contractors who can use their own personal vehicles and a phone-based app to deliver packages under what the company calls Amazon Flex.
Overseeing the entire operation locally will be Stephanie Kalili, a 2011 Nanakuli High School graduate who got an entry-level management job at Amazon in Wisconsin four years ago and most recently was a distribution station manager in Arizona.
“This is so meaningful to me,” Kalili said at Wednesday’s event in front of family members.
Gov. Josh Green said he was thrilled with what Amazon developed on the site, a facility that he said supports small businesses and helps diversify Hawai‘i’s economy.
Honolulu Mayor Rick Blangiardi also said he was thrilled, and called Amazon’s investment incredible.
Holly Sullivan, Amazon’s vice president of worldwide economic development, said the company has invested roughly $800 million in Hawaii since 2018, including the new facility and air cargo receiving facilities on O‘ahu, Maui, Hawai‘i Island and Kaua‘i.
The air cargo hub in Honolulu is served by Amazon’s own cargo planes under an operating partnership with Hawaiian Airlines.
Amazon’s effort to establish a ground distribution operation goes back several years, and began to shape up in 2020 when Amazon bought the 14-acre Kalihi Kai site from automobile dealer Servco Pacific Inc. for $125 million.
Tagawa, an ‘Iolani School graduate, said Amazon’s growth locally isn’t done.
“It’s been always a dream of mine, even though I live on the mainland now, to be able to come home and do something that’s positive for the community,” he said. “It really is important for me and it’s important for Amazon.”
