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Amazon expands shipping with $1.5 billion air cargo hub

by on01 February 2017


Reducing reliance on terrestrial postal carriers


Amazon announced on Tuesday  that it is looking to build an air cargo hub at the Cincinnati / Northern Kentucky Airport in order to lessen its reliance on terrestrial shipment carriers and reduce overall costs of processing packages outside of its own facilities.

The company said that its first air carbo hub will be called Prime One and is being designed to accommodate its growing fleet of planes, in the first sign that the company is ramping up the transportation, sorting and delivery of its own packages. The new hub will be located in Hebron Kentucky and is expected to create more than 2,000 jobs, replacing the large volumes of shipments the company places through FedEx and UPS in that region.

Back in August, the company announced its first-ever branded cargo plane – Prime Air – based on a Boeing 767-300 and operated by Amazon’s own air cargo provider Atlas Air. The aircraft was unveiled during Seafair’s Air Show in its hometown of Seattle. The company has committed to leasing forty such units through its air cargo partners Atlas and ATSG, while it currently has sixteen dedicated runway planes already in operation for Amazon Prime customers. The remainder are expected to be rolled out during the next couple of years.

Right now, most Amazon products can be delivered between a few hours and two days’ time using its Prime delivery service. The aircraft have allowed the company to add more capacity during peak shopping periods while ensuring that Prime customers receive their packages within one to two days. Meanwhile, the company operates a network of over 4,000 long-haul trucks for standard product orders, plus an additional few thousand employed for its Prime Now produce and grocery deliveries in select metropolitan areas.

While the prospect of leasing twenty eventual Boeing 767 freighter jets will deliver a sizable cost savings for the world’s largest online retailer over the next few years, the company has also been talking directly with Boeing for the purchase of several units, according to two reliable sources.

Last modified on 02 February 2017
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