Amazon Launching Air Freight Service
It has begun.
Amazon is launching air freight service.
The rumors have been circulating for a while that Amazon was planning to lease Boeing jets and take over shipping that the e-commerce giant has been relying on the UPS and FedEx to handle.
The rumors are now fact.
In a long-awaited and much-rumored move, Amazon is now officially going into the air freight business with the announcement that the Seattle online retailer has signed a five- to seven-year lease for 20 cargo planes.
“These planes provide critical capacity expansion to support the growth of [Amazon] Prime in the U.S. Planes provide an additional dedicated transportation method connecting Earth’s largest selection to customers from coast to coast. At our scale, supporting growth requires adding some of our own logistics capabilities,” said spokeswoman Kelly Cheeseman.
While EIN News Desk’s report that Amazon “will lease 20 Boeing 767 freighters, to be operated by ATSG, to serve Amazon customers in the United States” makes it clear that this is not international shipping, expect this to be only the beginning of Amazon’s move into global logistics.
In January, we shared a blog titled, “
That move makes it clear that Amazon plans to handle international shipping itself.
It seems that Amazon’s plans are to make it so consumers could order goods from anywhere in the world on Amazon.com and the company would not merely handle the e-commerce transaction, but all the aspects of shipping the goods.
Right now, shipping is a cost for Amazon.
Amazon counts shipping costs as one of its fastest-growing expenses, totaling 12.5% of sales in last year’s fourth quarter, up from 10.9% a year earlier. And the company paid $4.17 billion to service its shipping needs in the period, 37% higher than the year before.
As Amazon moves into shipping, it could actually turn a cost into a lucrative business!
Imagine a whole Amazon shipping division. It could be called Amazon Freight United. That’s right, it would be a big FU from Amazon to the shipping companies of the world that used to handle its business.
Those shipping companies see it coming. Here’s a nice tidbit from that WSJ article:
The head of France’s government-controlled parcel company La Poste told a local newspaper last month: “Amazon is our biggest customer. It is in the process of becoming our largest competitor.”
Notice that quote comes from France. The world knows that it is not just in the U.S. where Amazon is working on taking over shipping.
The question is, will Amazon be satisfied with only shipping goods sold its websites.
Amazon might not be satisfied with only shipping goods sold on its site. There is a lot of money to be made in international shipping. Once Amazon has all the pieces in place for worldwide shipping, it might take away more than just its business from the rest of the shipping companies.
The day you can go to Amazon with your cargo and get door to door air freight service around the world, like with our Express4Air, is a ways off. But it might not be that far off.
Source: UC Blog