Amazon Prime eases rural Alaska's pricey shipping woes

Shipping in Alaska is notorious for being expensive and difficult for rural residents trying to get specific goods. But thanks to e-commerce, that's changing.

Residents in far-flung hamlets in the Aleutian Islands, isolated towns in the state's Interior and even in the hub of Anchorage are taking advantage of Amazon Prime, which delivers just about anything to your doorstep without charging for shipping -- in exchange for a $99 annual membership fee.

People in rural parts of the state say they've seen Prime's popularity soar in the last two to three years. Many hear about the service via word of mouth and then sign up.

Kristy Robbins started using Amazon Prime when she heard that her friend had had a table saw delivered to Alaska with no extra shipping fees. Now Robbins uses Prime regularly both at home and in her job as a school principal / teacher in Eagle, an 86-person town about 370 miles east of Fairbanks.

She just ordered $4,000 worth of school gym supplies through the service -- everything from roller skates to tennis shoes to hockey equipment. She also replenishes the school's art supplies during the year via Amazon Prime.

"It's kind of nice for us because if we see we're running low in the middle of winter, we're not stressed because we're going to run out," Robbins said. "Before, we would just run out and do without."

Alaska's geography, weather and the lack of roads throughout most of the state make it tough to get items where they need to go. Shippers often charge extra fees to get deliveries to remote areas. This also means items in stores in remote parts of the state can come with bigger price tags.


In the winter, when the road into and out of town is closed, Eagle Mayor Donald Woodruff said, Amazon plays a key role.

"The people who would shop in bulk for long periods of time would go to Fairbanks and shop several months at a time," he said, "and Amazon is filling that gap in the winter, big time."

Amazon Prime is growing throughout the world. CEO Jeff Bezos said that Prime membership grew 53 percent in 2014. R.J. Hottovy, a senior e-commerce analyst at the research firm Morningstar, said that rural areas are a key part of that acceleration.

"You're seeing -- not just in Alaska but in other rural regions, where people don't have typical access to big box retailers -- growth in Amazon Prime membership," he said. "Even in rural settings, they have very good capabilities there to get products to your doorstep in a timely fashion."

By Morningstar's estimates, Prime membership grew about 63 percent from 2014 through September 2015 -- to an estimated 56 million members globally. Now, Amazon is even looking to lease 20 Boeing jets to launch its own air cargo service to deliver packages more quickly, The Seattle Times reported Thursday.

Amazon Prime may be a boon for remote customers but some say it's also forcing other companies to adapt in order to remain competitive.

"What's happening is because of the pressure that (companies) like Amazon are putting on, everyone else is trying to compete," said Dave Squier, vice president of operations for Anchorage-based Northern Aviation Services, the parent company of Northern Air Cargo. "They're looking for other ways to move their product in the same system."

As a result, he said, he has heard anecdotally that big box stores are shipping more goods to rural Alaska via bypass mail and looking for other ways to transport them on the cheap. Bypass mail, available only in Alaska, is a freight service through which goods travel to rural parts of the state via commercial air carriers -- hence, bypassing the U.S. Postal Service.

"Whereas a lot of folks in Alaska used to fly to Anchorage and do shopping sprees, now you can order from Amazon," Squier said. "These stores in essence are losing a little bit of business."

He's seen this trend pick up in the last two years, he said.

Bob Ripley, general manager of the Costco on West Dimond Boulevard in Anchorage, said the store isn't processing more bypass orders to rural Alaska than usual. He also said that Costco has made more goods available online in recent years, but that's not necessarily because of Amazon.

"They're a competitor of ours, for sure, but … that was more of a response from us," he said. "Online availability, that's something that people want. Either you make those things available online or you're going to get passed up."

In Cold Bay, Mayor Candace Schaack has also observed the Prime trend and is an avid user herself.

"I swear by it," she said, adding that because of the extra shipping costs to the local store, "(Prime) still costs less than going to the store here."

Her family used to make trips to Anchorage to buy things like diapers and coffee creamer at Wal-Mart and then ship boxes home, but Prime is easier and cheaper, she said.

Other residents in Cold Bay will use it for less common items, such as tires for four-wheelers, Schaack said.

UPS, the U.S. Postal Service, FedEx and Alaska Air Cargo wouldn't specify whether they've seen growth in Amazon Prime shipments in Alaska. Amazon didn't respond to a request for comment for this story.


"I would venture to say yes, it has been good for the state and everybody, but how much volume or increase it has been, that's a piece I don't know," said Squier, whose company does ship Amazon packages around the state. He said there's no way to know if those packages are specifically Amazon Prime deliveries or whether there's been an increase in recent years.

Jan Woodruff, the Eagle mayor's wife, gets 24-packs of mineral water on Prime for about $30, where a single, smaller bottle would cost about $3 at a store in Eagle.

She said that she orders "just about everything" on Prime, from mineral water to coffee beans, and her neighbors do the same.

"I think about anybody would tell you they've used it in some degree," she said.

Annie Zak

Annie Zak was a business reporter for the ADN between 2015 and 2019.