This comes hours after the company’s cloud-computing facilities in the Middle East faced power and connectivity issues on Monday after unidentified “objects” struck its data center in the United Arab Emirates.
This is not the only impact Amazon is facing due to the war in Iran and its impact in the Gulf countries.
Amazon has closed down its fulfillment centre in Abu Dhabi and suspended deliveries across the region as the e-commerce giant responds to the escalating instability in the Middle East that has created ripples across the region as well as the world, according to a new report.
Amazon’s internal memo
Amazon shared an update on the closure of its facility in an internal memo to employees and stakeholders this week, Business Insider, which has seen this memo, reported. As a result, customers in this region are experiencing delays in deliveries and returns, the memo reportedly said.
The company has also halted any business travel to Israel and Lebanon, while many Amazon employees across the region have transitioned to work from home model this week. The memo further said that Amazon employees in Saudi Arabia and Jordan have been instructed to remain indoors.
There have been no reports of an employee safety issues so far, Business Insider reported citing the memo.
“Our priority is the safety of our employees and partners across the region, and we’re working closely with our local teams to ensure they have the support they need,” an Amazon spokesperson was quoted as saying by the media outlet.
The disruption comes as a reminder on how quickly geopolitical tensions can cause strain on global supply chains.
Amazon has invested years to build and expand its logistical footprint in the Middle East after it acquired Souq.com for roughly $600 million in 2017.
The UAE serves as the backbone of this network, which also comprises of Amazon marketplaces in Saudi Arabia, Egypt, and Turkey.
Amazon has not specified how long these delays will sustain and how much longer deliveries in Abu Dhabi would remain suspended.
Shipment delays
The impact of the closure of the Amazon facility is also impacting third-party sellers, extending well beyond the company’s own warehouses.
The report mentioned citing the memo that nearly 3 lakh third-party sellers in the Middle East are facing shipment delays and potential order cancellations with the logistics channels tightening.
Many of these third-party sellers depend on Amazon’s infrastructure for cross-border shipping across the Gulf region, which have been impacted now.
According to the memo cited by Business Insider, the shutdown at Abu Dhabi is likely to reduce the network capacity of Amazon across its Middle Eastern business. The e-commerce major has also placed additional operational support on a standby mode in order to manage the disruption. The company is monitoring the situation, the memo said.
This came against the backdrop of coordinated US and Israeli airstrikes across multiple Iranian cities on February 28, targeting military command centres, air-defence systems, missile sites, and key regime infrastructure.
These strikes resulted in the death of Iranian Supreme Leader Ayatollah Khamenei and four senior military and security officials, with large explosions reported in Tehran and other major cities.
Key Takeaways
- The closure of Amazon’s Abu Dhabi facility has far-reaching implications for third-party sellers in the Gulf.
- Geopolitical tensions can severely disrupt logistics and supply chains, impacting global commerce.
- Amazon is prioritizing employee safety while managing operational disruptions in the region.
