“We are encouraged by the progress during the quarter and see opportunity to further improve in the second half of the year.”

In context

“ecall that these amounted to approximately $6 billion of incremental costs in Q1 when compared to Q1 2021. We've made solid progress in reducing these costs. For the second quarter, incremental costs were in line with our expectations at approximately $4 billion when compared to Q2 2021. Inflationary pressures remained at elevated levels in Q2, similar to what we saw in Q1. These include pressures from higher fuel, trucking, air and ocean shipping rates, which we expect will continue into Q3. We made strides to improve fulfillment network productivity in Q2. Staffing levels were more in line with rising Q2 demand, and we saw better optimization of our fulfillment network. On the transportation side, we've continued to improve delivery route density and improve package deliveries per hour. We are encouraged by the progress during the quarter and see opportunity to further improve in the second half of the year. Lastly, the year-over-year negative impact of fixed cost leverage was relatively consistent with Q1. There are two main drivers when talking about fixed cost leverage. First is the unfavorable comparison to very high holiday level utilization rates that we saw in the first half of 2021. And second is the normal step down in volumes off of our Q4 peak that we saw in first half of 2022. On the first point, we expect this challenging year-over-year comp will have ended in Q2. On the second point, we expect fixed cost leverage to improve in the second half of the year as we continue to grow into our capacity. We've also taken steps to slow future network capacity additions. Let's turn to AWS. We saw another strong quarter of innovation and customer engagement in AWS, where net sales were $19.”