Prime Mover: How Amazon Wove Itself Into the Life of an American City

  • In Science
  • 2019-12-01 16:50:44Z
  • By The New York Times
Prime Mover: How Amazon Wove Itself Into the Life of an American City
Prime Mover: How Amazon Wove Itself Into the Life of an American City  

BALTIMORE - Another big Prime Air 767 takes off from Baltimore-Washington International Airport - where Amazon's shipping last year eclipsed that of FedEx and UPS put together - and wheels above the old industrial city. Below, the online giant seems to touch every niche of the economy, its ubiquity and range breathtaking.

To the city's southeast stand two mammoth Amazon warehouses, built with heavy government subsidies, operating on the sites of shuttered General Motors and Bethlehem Steel plants. Computers monitor workers during grueling 10-hour shifts, identifying slow performers for firing. Those on the floor earn $15.40 to $18 an hour, less than half of what their unionized predecessors made. But in Baltimore's postindustrial economy, the jobs are in demand.

Near the Inner Harbor are the side-by-side stadiums of the Ravens and the Orioles, where every move on the field is streamed to Amazon Web Services for analysis using artificial intelligence. Football players have a chip in each shoulder pad, and baseball players are tracked by radar, producing flashy graphics for television and arcane stats for coaches.

Up in northwest Baltimore, a pastor has found funding to install Amazon Ring video cameras on homes in a high-crime neighborhood. Privacy advocates express alarm at proliferating surveillance; footage of suspects can be shared with police at a click. But the number of interested residents has already outstripped the number of cameras available.

In City Hall downtown and at Johns Hopkins University a few miles away, procurement officers have begun buying from local suppliers via Amazon Business - and even starred in a national marketing video for the company. Buyers said the convenience more than justifies interposing a Seattle-based corporation between their institutions and nearby businesses. Critics denounce the retail giant's incursion into long-established relationships. It is a very Amazon dispute.

As federal regulators and Congress assess whether Amazon's market power should be curbed under antitrust laws - and whether, as some politicians argue, the company should be broken up - The New York Times has explored the company's impact in one U.S. community: greater Baltimore.

Baltimore's pleading pitch last year to become an additional headquarters city for Amazon, promising a whopping $3.8 billion in subsidies, did not even make the second round of bidding. But Amazon's presence here shows how the many-armed titan may now reach into Americans' daily lives in more ways than any corporation in history. If antitrust investigators want to sample Amazon's impact on the ground, they could well take a look here.

Anirban Basu, a Baltimore economist who has studied the region for years, is skeptical of apocalyptic claims about Amazon, saying Sears and Wal-Mart were both once seen as all-powerful. But he called Amazon a "profit-margin killer" and said it should be scrutinized, particularly because technological trends that include artificial intelligence, driverless trucks, drones and new payment systems all play to its advantage.

"All these things are a threat to other industries," Basu said. "But they're all good for Amazon. As powerful as it is, Amazon is set to be much more powerful."

Ken Knight has felt Amazon's long reach. He plans to close his 152-year-old Baltimore houseware and hardware store, Stebbins Anderson, at the end of the year. He pins most of the blame on Amazon.

"It's put me out of business," said Knight, 70, who had hoped to pass the business to his son. Knight is especially aggrieved by government subsidies to the company in the name of job creation; he will be laying off 40 employees.

Amazon insists, in an argument it is likely to use in antitrust proceedings, that its market power is nothing like what people imagine. Yes, it accounts for 40% to 50% of online retail in the United States - but that is only 4% to 5% of total retail. (Wal-Mart's revenue is still twice that of Amazon, though Amazon's total value on the stock market is the fourth largest among U.S. companies, more than double Wal-Mart's.) And while Amazon may sell nearly half of cloud-computing services, it points out that the cloud makes up a small fraction of information technology spending.

"We welcome the scrutiny," said Jay Carney, Amazon's top Washington representative and a former White House press secretary for President Barack Obama. "We operate in huge competitive arenas in which there are thousands and thousands, if not millions, of competitors. It's hard to argue that if you're 4% of retail, you're not in competition."

Baltimore offers in microcosm the contentious issues that Amazon's conduct has raised nationally. The erosion of brick-and-mortar retail. Modestly paid warehouse work and the looming job destroyer of automation. An aggressive foray into government and institutional procurement, driving local suppliers to partner with Amazon or face decline. A swift expansion in air cargo, challenging FedEx and UPS. The neighborhood spread of video and audio surveillance. And the steady conquest of the computing infrastructure that underlies commerce, government and communications, something like an electric utility - except without the regulation imposed on utilities.

Amy Webb, founder of the Future Today Institute, a strategy firm, who lives part time in Baltimore, said Amazon's impact only began with its retail platform.

"It's the invisible infrastructure that powers our everyday lives," said Webb, who examines Amazon in her book on the tech giants, "The Big Nine." "Most of us don't know 95% of what Amazon is doing."

She called the contest for Amazon's second headquarters a "ridiculous parade, a beauty contest" in which communities nationwide offered up inducements while failing to make a clear-eyed assessment of costs and benefits. With its capabilities, market sway and long-term strategy, she said, Amazon now conducts itself like a "nation-state."

A River Through Commerce and Culture

None of this was imaginable in 1994, when Jeff Bezos paged through a dictionary in search of a name for an online bookseller and stopped at "Amazon." Not only was it the largest river in the world by volume - it was four times bigger than the runner-up, which appealed to Bezos' outsize ambitions. Books were just the start.

Some 25 years later, fueled by customers' addiction to click-and-done convenience and speedy delivery, Amazon has quietly flowed into many areas of life, bringing to more and more arenas its tireless innovation, relentless focus on data, unforgiving employment practices and omnivorous competition. In many homes here, as across the country, it is the ultimate labor-saving device: supplier of electronics, clothes, groceries, books, movies, music, information and security. More than half of U.S. households now have an Amazon Prime membership, and most shopping searches begin on Amazon, not Google. Globally, Amazon, whose critics call it the "apex predator" of digital business, delivered 10 billion packages last year - more than the number of people on the planet.

Greater Baltimore accounts for 1% of Amazon's sales nationwide - just about its share of the population, according to data prepared for The New York Times by Rakuten Intelligence, which tracks e-commerce.

But as a transportation hub, with Interstate 95 and major rail lines converging near a busy port and airport, Baltimore punches above its weight - originating 2.38% of Amazon's shipments in the United States, Rakuten said.

Even with all that shipping and logistics, Amazon ranks just 14th among local employers, according to The Baltimore Business Journal. Yet like an online shopper who realizes one day that half his possessions came from Amazon, a Baltimorean who looks for the company's footprints can find them everywhere.

On a midtown back alley, Todd Blatt, one of 18,000 Maryland sellers on Amazon Marketplace, uses a laser printer to turn out little models of the iconic bus stop benches that read "Baltimore: The Greatest City in America," peddling them online with an assortment of toys and bric-a-brac. He's battled counterfeits from competing sellers on Amazon but isn't really complaining: "I haven't had a real job since 2012," he said.

When the Baltimore Behavioral Lab, a research organization, conducts consumer surveys, it posts them on Amazon's Mechanical Turk microtask site. Users earn tiny sums of money for participating.

Amazon Smart Home is partnering in one Baltimore suburb with Lennar, the country's largest homebuilder, to install Amazon Echo devices, which use voice-activated Alexa to control Amazon Ring video cameras outside. In a tough city neighborhood where drug dealers intimidate neighbors, the Rev. Terrye Moore is organizing a subsidized video setup after hearing a radio promotion for Ring by NBA great Shaquille O'Neal.

Public libraries are stocked with digital audiobooks from Amazon's Audible, and browsers can check reviews on Amazon's Goodreads. Down the road in Annapolis, Amazon Studios filmed scenes in the Jack Ryan television series.

Amazon owns two Whole Foods grocery stores in Baltimore, is opening a third, and recently began free delivery to Prime members. In a dozen convenience stores, it operates Amazon Lockers, where customers can pick up purchases. It has enlisted Kohl's stores to handle returns. Its trucks and vans are everywhere.

Experts at Baltimore's academic medical complexes are discussing whether Amazon is preparing to disrupt their industry, too. In just the past 18 months, the company joined the health care venture Haven and bought the e-medicine pioneer Health Navigator as well as Pillpack, now part of Amazon Pharmacy.

Through Amazon Web Services, the biggest provider of cloud computing, the company is building the country's digital backbone. AWS employs a small staff of software engineers in Baltimore - the company declined to say how many - and provides the computing infrastructure for many institutions, from Johns Hopkins to the investment firm T. Rowe Price and the sportswear company Under Armour. Even the secretive National Security Agency, south of Baltimore at Fort Meade, acknowledged that it relied on AWS "for various administrative and mission needs."

The arms of Amazon sometimes cross in unexpected ways. Although Under Armour uses AWS, the clothier has had to balance its own online sales with its "storefront." The Maryland Department of Human Services downtown partners with AWS in a cloud-computing effort called MD Think, designed to streamline social services. At the same time, the department said, it provides food stamps to nearly 600 local Amazon employees, largely part-time warehouse workers.

Even as its omnipresence draws antitrust scrutiny, Amazon seems unlikely to pull back. In June, Bezos, by most accounts the world's richest person, trumpeted a new Amazon plan to launch 3,200 satellites to provide internet service around the world. He argued that Amazon's size meant it should take on huge new challenges.

"Amazon is a large enough company now that we need to be doing things that, if they work, can actually move the needle," Bezos said.

Bezos, who is renovating a $23 million house in Washington, an hour south of Baltimore, has long pushed the mantra of "customer obsession," and it has paid off. In the Harris Poll on the popularity of major U.S. companies, Amazon has ranked No. 1 or 2 each year since 2012. By comparison, Google fell to 41 this year and Facebook to 94.

But putting customers' convenience first, a key to Amazon's spectacular growth, can put a big squeeze on everyone in the company's long supply chains - warehouse workers, independent sellers, delivery drivers, cargo pilots - not to mention smaller competitors.

A New Kind of Assembly Line

Shaquetta Taylor, who goes by Shaq, scanned an item - a bag of glazed pecans. Her screen directed her to "Stow Item," and the digital clock started counting - 1, 2, 3, 4, 5, 6, 7 - as she found space for it in the robotic pod. Then there were cactus-shaped tea lights - 17, 18, 19, 20 - and a children's crafting kit and a magnetic door screen ("Actually, I have this myself," she remarked).

Taylor - 43, in glasses and a "Toy Story" T-shirt, mother of two sons and grandmother of a 3-year-old - arrived four years ago at Amazon's warehouse awed by the company's cachet. "When I first came here, I thought, 'I'm not good enough for Amazon,'" she said, taking a brief break from Stow Station 3301.

But after a year, she was asked to become an "ambassador," helping out newer colleagues at this Amazon Fulfillment Center, shorthand name BWI2, built where GM's Baltimore Assembly Plant operated for seven decades. Its scale is mammoth: 27 acres of floor space, 2,500 employees, 14 miles of speeding conveyor belts.

If Taylor doesn't make her numbers, she can be fired. She's thrived because she's fast and accurate over a demanding 10-hour shift with two half-hour breaks, one of them paid.

The warehouse is run by Preet Virdi, general manager and an Amazon true believer who moved from India to attend Georgia Tech 13 years ago. Virdi, 35, said his top priority was safety - a whiteboard recently listed 40 head injuries and 109 foot injuries so far in 2019 - and added that his next priority was "how we make the workplace more fun."

The real boss is data, however, as it is everywhere in Amazonland. Everything that happens is timed and measured in a way that efficiency experts of earlier generations could only dream about. If the computers said Taylor or other "associates" are too slow or sloppy, they're out. And if Virdi doesn't make his numbers, he'll be out too.

That is nothing new in industrial practice. But Amazon, with an unparalleled mastery of digital tools and the coolly calculating tone set by Bezos, has brought it to a rare extreme. The company's astonishing success has made it, in turn, a powerful influence on other companies.

Some workers thrive despite the pace. "The day goes by quick," said Robert Taylor, 51, a leader in the warehouse chapter of Glamazon, for LGBT employees. "All these other people go to the gym. Amazon pays me to stay in shape."

Some see a path to advancement. Samaira Johnson, 26, a high school graduate with a pet iguana at home, is already a leader among the employees trained to work with warehouse robots. Asked where she saw herself in 10 years, she replied, "Running an Amazon building like this one."

Others falter. Sharon Black, 70, a veteran Baltimore activist who has held assembly-line jobs at GM and other plants, worked for a few months at BWI2 last year and found a striking difference: At Amazon, the computers ruled.

That wasn't entirely negative, she said. In the application process, Amazon didn't care about age, gender or race - only that a person could walk several miles a day and lift 50 pounds. "They're an equal opportunity exploiter, I'll tell you that," Black said. "You could come in with three arms and they wouldn't care."

Black said she quit after two written warnings that she wasn't meeting productivity standards, knowing a third would get her fired.

"The machines determine so much," she said. "You're clocked from beginning to end. They grind through people."

When an employee told the National Labor Relations Board that he had been fired for complaining about working conditions, the company said he had it wrong: He had been fired for working too slowly.

In fact, an Amazon lawyer wrote to the NLRB that last year, it had fired "hundreds of other employees" at the Baltimore warehouse for failing to make their numbers. The letter, obtained by The Verge, listed more than 800 workers fired in the previous year, but the company now says the correct number was 309.

Automated dismissals are a feature, the letter said, not a flaw. "Amazon's system," the lawyers wrote, "automatically generates any warnings or terminations regarding quality or productivity without input from supervisors." Amazon said termination decisions are ultimately made by managers.

Workers at Amazon who run into that kind of trouble have no unions to represent them - a shift from Baltimore's past. GM employees were represented by the United Automobile Workers. At the second warehouse, on the old Bethlehem Steel site, United Steelworkers held sway. At both plants, the pay was adequate to support a family.

In the GM plant's final years, line workers made an average of $27 an hour, equivalent to more than $35 today. GM workers could make $80,000 annually with overtime, according to contemporary news reports, equal to $102,000 in 2019 dollars.

The vehemently anti-union Amazon has raised its lowest hourly pay to $15.40, which is a little over double the federal minimum wage, the company points out. But even a veteran worker at its BWI2 warehouse would have to put in considerable overtime to get to $40,000 a year, less than half of what a GM worker could make in the past.

Nor are the job numbers comparable. The GM plant employed 8,000 at its peak; Bethlehem Steel employed 30,000. Amazon has a total of 4,500 workers at the two warehouses.

In a statement, the company called its jobs "safe and innovative," noting that the warehouses were built on "blighted property" that was vacant for years before Amazon "injected life (and jobs)" back into the East Baltimore brownfields.

In a city that has shed most unionized industrial jobs, Amazon gets plenty of applicants. Its hourly pay is $2 or $3 higher than at many comparable employers, and benefits are also more generous: medical, dental and vision coverage and a 401(k) with a 50% match. The company will reimburse an employee up to $3,000 a year for further education or give a worker $10,000 to start a business delivering Amazon goods.

Under the circumstances, government officials here are grateful for Amazon's presence. The company has gotten $65 million in tax incentives and loans to build the two big warehouses and related smaller facilities, according to the Maryland Department of Commerce.

The company said it had spent about $1 billion on infrastructure in Maryland to date; hired about 7,000 full-time direct employees, nearly all at warehouses; and used contractors who hired another 2,100 people.

But economists said online shopping has also erased thousands of retail jobs, and critics pointed to other costs, including traffic congestion and environmental effects, so assessing the company's net impact is difficult. Few of the Amazon jobs in Baltimore are the highly paid tech and management positions appearing in northern Virginia, which Amazon chose for its 25,000-strong second headquarters, called HQ2. (Amazon chose New York City for a similar hub but withdrew in the face of local opposition.)

Such a boon might have been transformative for Baltimore, a struggling city surrounded by wealthier suburbs. But the city ended up on the company's long list of also-rans, 230 locales that turned over reams of valuable workforce and worksite data to Amazon in elaborate applications - and got nothing in return.

In a statement, Amazon said the top criterion for choosing a location was "the availability of tech talent." It added, "Nowhere did Amazon say HQ2 was a project designed to help communities in need."

For Black, the former employee, one experience captured what she thought was the eerily inhuman warehouse culture. In November last year, two contract workers were killed when a tornado collapsed a wall of a smaller Amazon warehouse opposite BWI2.

Black said she drove to work the next morning, steering around fallen trees, wondering how the company would handle the deaths at the brief standing meeting that began each shift.

"I thought they'd have two minutes of silence," she said. "Nope. We didn't pause." Instead, she said, there was the usual tribute to the "power picker" - the outstanding performer in her unit, as measured by the computers. Michael Jackson music played, she said, and the supervisor shouted, "Let's have a better day than yesterday!"

It was a reference to production levels, not to the overnight catastrophe.

Rachael Lighty, an Amazon spokeswoman, said the company offered counseling and hosted the most affected employees for a meal. "We are committed to constantly improving how we communicate with and engage with our employees," she said.

Despite the demanding nature of their jobs, many warehouse workers fear Amazon intends to replace them with robots, a worry shared by some experts and politicians like Andrew Yang, the presidential candidate who warns that automation will create mass unemployment. Amazon has begun testing machines that can pack boxes; and humans can be prone to injury, easily exhausted, eager to unionize and outspoken about gripes.

The robots that silently cruise through the warehouses, each carrying up to 1,200 pounds of purchases, are none of these things.

But Webb, the futurist and technology writer, said she believed Amazon had made a different discovery: that the job of moving products from bin to pod and pod to box is presently more cheaply performed by humans than by robots.

"It's not that the robots are taking over," Webb said. "It's that we've been relegated to robot status."

Asked whether the Baltimore-area might automate further, Lighty, the Amazon spokeswoman, said there was no such plan.

"We have hundreds of robots here but thousands of people," she said. "And it's the people that make the Amazon magic happen."

Buying Local, Via Seattle

A marketing video released last spring appears designed to capture some of that magic right in Baltimore. Shots of the city's harbor and iconic row houses alternate with views of the busy Amazon warehouse. "We help Baltimore businesses buy from other Baltimore businesses," said Virdi, the warehouse manager, as packages raced past on conveyor belts.

More surprising than Virdi's remarks are enthusiastic endorsements from City Hall and Johns Hopkins, whose chief purchasing officers laud Amazon in the video for helping them connect with local suppliers.

It is a glimpse of Amazon's major push into territory it has not yet conquered: purchasing by government and other institutions that relies on competitive bids and fixed-price contracts. At the federal level, Amazon lobbied for legislation - congressional staffers called it "the Amazon amendment" - designed to help it win government sales. At the local level, it has fended off accusations of predatory competition by saying it can actually connect local buyers with local suppliers.

Brian Smith, Johns Hopkins' purchasing officer and a subject of the video, said local businesses often found the big university hard to approach. But he met an Amazon representative at a convention, and now Johns Hopkins has a customized Amazon Business page that gets local vendors "in front of a lot of eyeballs here," he said. Erin Sher Smyth, Baltimore's chief procurement officer, noted that Amazon's website flagged such criteria as minority and female owners and made record keeping easy.

But like many people who find Amazon both convenient and worrisome, Smyth admitted to a certain ambivalence about its impact.

"In my role as city purchasing agent, I'm trying to get the best product for the best price, efficiently, and Amazon lets me do that," she said. "In my personal life, I do worry about Main Street shops."

Her anxiety is widely shared. As in other cities, many Baltimore shopping districts are anemic and pocked with vacancies. The waterfront Harborplace shopping pavilions, once a symbol of urban revival, are in receivership.

The causes include mismanagement, shifting tastes and big-box competition, but Amazon's unstoppable growth is a factor. In Baltimore and its suburbs, the average Amazon shopper makes nearly 40 purchases a year totaling about $1,300 - spending that is up more than 50% since 2016, according to Rakuten.

Now, as it moves into institutional procurement, Amazon has sought to persuade civic-minded public officials that it can be a booster. Both the city and the university designated a particular company located about 15 miles southwest of Baltimore, AJ Stationers, as a preferred supplier of office products via Amazon, in part because the firm is owned by a minority woman, Angela Jeung.

That has been a windfall for AJ Stationers, said Rusty Balazs, the sales manager, who estimated that annual sales to Johns Hopkins had climbed from $100,000 to $2 million. But AJ Stationers has shrunk from two stores and about 50 employees two decades ago to a website and a dozen employees today, he said.

Mike Tucker, chief executive of the Baltimore-based independent office product dealers' association, said AJ was really a "poster boy" whose local deals, highlighted in the marketing video, were a public relations tactic intended to obscure Amazon's impact on small businesses already battered by Office Depot and Staples. (His association, which had 12,000 member businesses in the 1980s, now has 1,500.)

"That Amazon convenience comes at a big price," said Tucker, noting that he welcomed the antitrust inquiries down the road in Washington. The price is paid, he said, not just by local dealers but by their myriad business connections, from cleaning services to gas stations, eroding local employment.

"It doesn't matter that the local business served you and helped you with your problems for years and years," he said. "Amazon does whatever it takes to crush the competition."

Addressing such criticism, Amazon said it offered "best-value pricing for education and public-sector organizations" and helped small businesses thrive "because customers are able to discover suppliers."

Tucker said he shared the Amazon marketing video with a local office products executive who had seen his Baltimore sales drop. When the executive realized Amazon had moved into his market, his "head exploded," Tucker said.

But the executive declined to speak with the Times, Tucker said, for fear of angering Amazon. "He's afraid that they may have to make a deal with the devil to survive," Tucker said.

Onward and Upward

Anyone who wants a glimpse of Amazon's expansive appetite might pay a visit to BWI Airport, where a new white warehouse seems to stretch on and on. Workers are putting the final touches on a $36 million, 200,000-square-foot building, financed with tax-exempt bonds, that will dwarf Amazon's current airport operations. There are bays for 93 tractor-trailers to load and unload at once.

The growth at what Amazon Air calls its "gateway" - one of 25 around the country - has been rapid. In 2016, Amazon Air, a new division, did not operate through BWI. The following year, Amazon moved more freight through the airport than either FedEx or UPS, the industry leaders. And in 2018, it loaded and unloaded 9,300 metric tons of goods at BWI, more than FedEx and UPS combined, though globally their fleets remain far larger.

Morgan Stanley warned a year ago that "the market is missing the risk Amazon Air poses" to FedEx and UPS, knocking down those companies' stocks. Other analysts are skeptical. But FedEx, worried that its longtime partner was becoming a competitor, announced last summer that it was ending air and ground delivery for Amazon.

Until recently, the company's BWI expansion here was swathed in secrecy; environmental reports referred only to a "Midfield Cargo Operator," and Maryland's governor, Larry Hogan, spoke last year of welcoming to BWI "a very well-known e-commerce giant." Although its Boeing 767s are often painted with the Prime Air logo, Amazon contracts its flying to several lower-profile operators, including Atlas Air, ABX Air, Air Transport International and Southern Air.

One reason for Amazon's reticence may be stormy negotiations between its biggest carriers and the Teamster units that represent pilots. Union records show that Atlas Air, the biggest Amazon flyer, pays pilots about one-third less than FedEx or UPS.

Ed Nirel, a first officer for Atlas, said he had flown into Baltimore "at 3 a.m. and 3 p.m." and had watched the operation expand, with a half-dozen Amazon Air jets now sometimes jockeying for docking space. He said the pilot pay gap had led to staffing problems; he has worked as many as 17 days in a row for Atlas, he said, compared with a maximum of four days at his last job with ExpressJet.

"I'd love to stay at Atlas; it's a great group of pilots," Nirel said. "The Amazon airport operations are pretty cool to see. But if FedEx or UPS offers me a job, I'm going to go. My working life would be better, and it would be better for my family."

Robert Kirchner, who recently retired as an Atlas pilot and now is a union negotiator, said Amazon's drive for speedy delivery was stretching the workforce to the breaking point.

"Atlas' fatigue complaints are through the roof," Kirchner said. "They're wearing the pilots out, and it's a completely unsafe situation." He said the union was closely tracking the still-unexplained crash of an Atlas 767 carrying Amazon cargo into a Texas swamp last February, killing three, to see if fatigue was a factor.

Atlas, responding to questions from the Times, said its pilots got a "competitive total compensation package" and flew an average of 42 hours a month, compared with an industry average of 53. It said it was working with the National Transportation Safety Board to understand what went wrong in the Texas crash.

Drive five minutes from Amazon's new air cargo hub, and you find a humbler scene: a package delivery station surrounded by Prime tractor-trailers, unmarked white vans used by Amazon contractors and the flex drivers who load their cars with packages for what the industry calls the "last mile." There are new SUVs, compacts with rooftop carriers and banged-up sedans. Drivers use the Amazon Flex app to sign up for "blocks" - $54 for delivering a certain number of packages between 7 a.m. and 10 a.m. on one recent day, or $72 between 5:15 p.m. and 8:15 p.m.

Amazon just opened a second Baltimore delivery station. Every such station Amazon opens, said Marc Wulfraat, a supply chain consultant, means that about 40,000 packages a day, previously delivered by the U.S. Postal Service and other carriers, shift to Amazon's own operation.

One consequence is a steady shift of work from unionized Postal Service jobs to flex drivers, many of them struggling to get by. In August, the Postal Service explained a big third-quarter loss by saying in a filing that "certain major customers" were cutting back on package shipping. In Baltimore over the past two years, the Postal Service share of Amazon deliveries has dropped from about 60% to under 30%, according to Rakuten. Amazon's own share of its Baltimore deliveries has risen to 50% from 20% in 2017.

On a private Facebook group for flex drivers working the Hanover, Maryland, station near BWI, the replacements for postal workers and FedEx truckers trade tips and grumble.

Several said the station was so jammed they had to load packages outside in the rain. Whoever at Amazon designed the 25-mile route to Sykesville, Maryland, one driver groused, "needs to be drug-tested, like seriously." Another complained that a 28-package nighttime route listed at 2 1/2 hours took her more than four hours to complete, and "a dog came out on me on top of that because it was too dark to see."

Net Profits

But the most profitable part of Amazon's operations has nothing to do with the clamor of warehouses, airports and trucks. All but invisible to the public, Amazon Web Services hums quietly in the background of a huge and growing slice of American life.

Countless Baltimore-area businesses, nonprofits and government programs use AWS. When Baltimoreans stream a movie on Netflix instead of Amazon Prime, they are still using Amazon - because Netflix relies on AWS' cloud computing. (The Times is also an AWS customer.)

Many companies see AWS as the computing equivalent of Baltimore Gas & Electric, the local utility: They plug into the cloud - the generic term for rented, off-site computer space - and pay for what they use. Some fret about what will happen when Amazon's cloud crashes, as happens periodically with power companies. But AWS has proved quite reliable so far.

Consider T. Rowe Price, the global investment firm headquartered on Baltimore's Inner Harbor, which has steadily replaced its own information infrastructure with Amazon's service.

As it adds customers in Asia and Europe, said Nigel Faulkner, chief technology officer at T. Rowe Price, the traditional approach would be to build its own data servers in new markets.

"With Amazon we can rely on their servers in those places," he said. "That's cheaper." T. Rowe Price can increase or decrease its use of AWS services at any time, paying only for what it uses. And there are hundreds of applications built on AWS offering specialized services, from database management to artificial intelligence.

The NFL also uses Amazon's software tools, crunching data from more than 200 metrics in every football game. Data streams to the AWS cloud from chips embedded not just in players' shoulder pads but in referees' jerseys, the football and even the chains used to measure first downs. Machine-learning tasks that used to take all night are completed in 20 minutes using the massive computing capacity of AWS.

"What we've really done is take a lot of the gut instinct some people have and quantified it," said Matt Swensson, the football league's vice president of emerging products and technology.

When the Baltimore Ravens faced the Miami Dolphins, for example, NFL analysts could annotate the video with the time Lamar Jackson took to get a pass off (3.8 seconds), the precise distance of the throw (46.9 yards) and the odds that Marquise Brown would catch it: 32%. (For the record, he did catch it - for a touchdown.)

AWS, like its cloud competitors, is especially popular with tech startups, which can pay as they grow, said Chris Sachse, founder of Think|Stack, a Baltimore company that works closely with AWS and provides cybersecurity and infrastructure consulting.

Sachse, whose grandfather and father sold trucks for a living and who serves on a state workforce development board, said he saw tech jobs as a potential path for Baltimoreans without higher education because they require expertise but not degrees.

"A college degree doesn't help you with AWS because it's all brand-new," he said. "A lot of people think the death of industry has made it impossible to have middle-class jobs. I think we have a path to those middle-class jobs."

Sachse said he has advised Baltimore startups gratis, including one working to streamline philanthropy and another selling subscriptions to products like razors. He often asks AWS to provide free training and other services, and they usually step up.

"I'm sure they see the capitalist return on it," he said. "For them, it's, 'The more people we train to use AWS, the more business we'll have.' If these startups hit it big, so does AWS."

The Giant and the 'Little Guy'

Mike Subelsky, a Baltimore tech entrepreneur, once extolled AWS' virtues at the trendy South by Southwest festival, talking about his email startup while dressed as "Mr. Spam." A regular Amazon shopper, he said Amazon had saved him more than once, recalling its speedy delivery of a crucial Spanish-English dictionary for his middle-school daughter.

Yet these days, he's ambivalent. He worries about Amazon's invasive data collection, the influence exercised by its algorithms, the heat generated by its enormous computer centers and the exploitation of its workers. "It's a U.S. company that's hyperdominant and rich and has incredible market power, and they're not in it for social good," he said.

His mixed feelings echo those of many Americans about the emerging dark side of digital life.

"For my generation, the internet was the equivalent of landing on the moon. But the internet seems to have made some things so much worse," he said. "I'm not sure this is the world I want my kids to be growing up in."

At Stebbins Anderson, the home products store dating to 1867, a 30% off closing sale is underway. Knight, the owner, recalls the beginning of his long battle with Amazon nearly 20 years ago, when customers would ask for a 6% discount to match the online retailer, which for many years collected no sales tax.

Amazon started imposing sales tax after building warehouses in Maryland. By then, it was also receiving loans and tax credits from the state while drawing away more and more of Knight's patrons, he said. Even his own daughters, busy at their jobs, found online ordering irresistible.

"It would have been nice to get some of the benefits Amazon gets," he said. "But the little guy always ends up footing the bill."

Across town, however, there's an unexpected development in the area where Amazon got its start: books. It decimated Borders and Barnes & Noble in Baltimore. But that made room for a small, hardy band of independent bookstores, led by the Ivy Bookshop, which opened a second bookstore-cafe called Bird in Hand in 2016.

Like independents making a comeback around the country, the Ivy sells books at full price, making its success all the more striking. Customers will pay $30 for a book they might get with a click for $20 online, in part because they don't like the world they believe Amazon is building, said Emma Snyder, the shop's owner.

"There's much more consciousness of supporting a bookstore and specifically not using Amazon," Snyder said. "Part of what people don't like is that Amazon debases the value of things. We're commercial spaces, but we fundamentally exist to feed and nurture people's souls."

This article originally appeared in The New York Times.

© 2019 The New York Times Company


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