SAN FRANCISCO — Amazon’s rumored plans to launch its own air freight line could be moving forward with reports the online retailer is in talks to lease 20 Boeing 767 freighter jets.
Amazon is creating a logistical system that will include an overnight air freight line in the United States, the shipping news site CargoFacts and the Seattle Times reported.
Amazon’s already been running five Boeing 767’s a week out of Wilmington, Ohio for several months, said John Haber, CEO of Spend Management Experts, a supply chain management consulting firm.
Amazon has increasingly been getting into the logistics business.
“They’re tired of having their hands tied and relying on other carriers to be moving the incredible amount of volume they have. If they’re running the cargo operation, then they have a lot more control over their product,” said Haber.
Currently, Amazon’s freight is shipped by UPS, FedEx and the U.S. Postal Service. Bringing some of that shipping in-house could save the company money as it works to build out its rapid delivery system for its lucrative Prime members.
Both Amazon and Boeing declined to comment.
Bringing more delivery in-house does three things for Amazon, say experts.
First, it gives the company capacity. Amazon needs to in-source more of its transportation logistics so it can continue to grow, say experts.
“We don’t think third-party carriers are providing enough capacity for Amazon. That’s forcing Amazon’s hand, to some extent,” said Colin Sebastian, Internet analyst at investment firm Robert W. Baird.
Secondly, it gives Amazon control over delivery, which is a large part of the customer experience.
“The more Amazon can control that delivery chain, the better they can control the experience for their customer,” said Sebastian.
Finally, Amazon is a master at building infrastructure for itself and then selling excess capacity to others at a profit.
For example, Amazon Web Services has proved to be a major source of revenue for the company.
Amazon originally set up its own storage system just to save money, then they said, “We’ve got so much buying power, why don’t we do it for other people?” said Haber.
“Now we think that’s what they’re doing with shipping,” he said.
Amazon would have to first lease jets, as it does not have an Air Operator’s Certificate that would allow it to fly its own airplanes, The Seattle Times reported Friday.
However that’s not a problem, and in fact would allow Amazon to work with third parties that can help it quickly build out capacity. “They can get creative with this. There are plenty of companies that lease planes,” said Sebastian.
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