Amazon Air expands, but not at the expense of others

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Prime time for Prime Air

Amazon has already put 40 767 freighters into operation, taking delivery of the latest in December 2018. It’s about to push forward during 2019 with another 10, and more beyond that as it sees fit.

It’s managed to do this without impacting the main parcel shifting businesses of FedEx and UPS.

The reason is simple, Amazon is only transporting the inventory that either move slowly, or are not available at all of its key USA distribution points, and takes them to places they can easily be shipped from inside Amazon’s local delivery business.

Much of Amazon’s business – as much as 80% of its product – is supplied by small-medium companies who simply don’t have the ability to stock items in places for one or same day deliveries. At best they would use more expensive services, USPS, UPS, FedEx, and several days would be needed for any cost-effective delivery service customers would be prepared to pay for.

Amazon Air cuts out the delivery issues, shipping goods to local delivery points for quick distribution, pre-stocking them in places smaller companies could never reach as quickly.

Amazon Air’s real strength lies in the ability to move items to areas that it knows they will sell in over time, it’s about cutting local lead times, rather than actually reacting, for example to get product A from New York to San Diego overnight. That’s where the FedEx and UPS businesses expedited services come if needed.

Amazon is about to move its main air-freight hub from Wilmington, Ohio, to Cincinnati/Northern Kentucky Airport, and announced plans to build a regional air hub at Fort Worth Alliance Airport in Texas.

 

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