New analysis on the growth the Amazon Air cargo network shows rapid expansion – though Amazon' fleet is still much smaller than its parcel shipping partners and rivals.
The report from DePaul University of Chicago's Chaddick Institute for Metropolitan Development is titled "Primed & Positioned: Strategic Moves By Amazon Air."
Supply Chain Digest Says...
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| Flights into Cincinnati or Wilmington are especially critical due to the fact cargo can be hauled from both those hubs by truck in fewer than 10 hours to areas in the East Coast, Mid-Atlantic , South and Midwest. |
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The in-depth analysis by DePaul's Joseph Schwieterman, Jacob Walls, Borja González and Crystal Bell says key recent moves by Amazon Air include:
• Successfully launching an intra-Europe network using planes registered to Amazon
Expanded flights by 15% since August and positioned itself for another growth spurt this spring
• Set into motion plans to fly numerous airplanes it owns rather than leases, primarily Boeing 767s
• Invested heavily in Cincinnati and Wilmington, OH, air hubs, giving Amazon new options to handle third-party shipping
• Boosted its presence at major passenger-oriented airports in the country's largest cities
The report says Amazon Air is likely to fly 160 daily cargo flights per day by this summer, up from 140 currently. (See graphic below).
If that happens, the report says, it could make Amazon a potential carrier of business-to-consumer packages outside its own parcel network, competing with UPS, FedEx, and DHL.
The report estimates Amazon Air expanded its flight schedule between August 2020 and February by 18 flights per day.
If Amazon Air does reach 160 daily flights by June, it will have more than doubled that number in just 13 months.
However, the report does note that a precise measure of the size of Amazon Air's fleet is hindered by a lack of publicly disclosed details about all its contractual arrangements. And investment analysts have noted that a significant amount of cargo may move on planes not registered to Amazon Air, particularly on routes operating to points outside the US.
The report says more Amazon Air expansion is planned, with a focus on its largest hubs, especially Cincinnati and Wilmington.
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Those investments "position Amazon to move assertively into third-party delivery at the time of its choosing," the report notes, adding that "The growing density of flight operations and warehouses around these airports, and the investments being made by other retailers and logistic providers in this area, give Amazon newfound capacity to provide expedited business-to-consumer deliveries for purchases not made on the Amazon platform."
In November 2020, Morgan Stanley publicized its expectation that Amazon will launch a third-party delivery service in the United States, possibly as soon as this year.
Flights into Cincinnati or Wilmington are especially critical due to the fact cargo can be hauled from both those hubs by truck in fewer than 10 hours to areas in the East Coast, Mid-Atlantic , South and Midwest.
Combined the two airports, 70 miles apart, represents about 30% of total Amazon Air flights.
The report adds that "Amazon would likely focus on retailer-to-consumer shipments (e.g., moving packages from retailer warehouses to consumers) without trying to replicate the comprehensive services offered by FedEx and UPS."
And with good reason.
Amazon's feet of 85 aircraft, after 11 just acquired used Boeing 767-30i0 are put into service, is still dwarfed by FexEx's fleet of 680 planes and UPS' 572 aircraft.
The excellent full report is available here: Primed & Positioned: Strategic Moves By Amazon Air.
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