Amazon Wants to Be Its Own Deliveryman

Latest investment is $1.5B air cargo hub
By Newser Editors and Wire Services
Posted Feb 3, 2017 12:46 AM CST
Amazon Spending $1.5B on Own Air Cargo Hub
Amazon boxes are shown stacked near a Boeing 767 Amazon "Prime Air" cargo plane in Seattle.   (Ted S. Warren)

Amazon isn't content just being the "everything store." Increasingly, it looks like it wants to be its own deliveryman, too. The company's announcement this week of a new air cargo hub in Kentucky is merely its latest foray into building out its own shipping and logistics unit, the AP reports. Amazon plans to build a worldwide air cargo hub at a northern Kentucky airport about 13 miles southwest of Cincinnati. The nearly $1.5 billion investment is expected to create 2,700 jobs. If successful, the move could ultimately mean lower costs for Amazon—and possibly faster delivery and low prices for consumers. But it could also pit Amazon against package deliverers like FedEx and UPS.

"It's not a big surprise," Cathy Roberson, founder of consulting firm Logistics Trends & Insights, says of Amazon's Kentucky announcement. "By utilizing that location they can reach anywhere in the US in two days." Amazon has long plowed its profits back into its business investments. To speed up its delivery, it has invested in opening new distribution centers and leasing fleets of trucks. In May, Amazon leased 40 Boeing jets from Atlas Air Worldwide Holdings and Air Transport Services Group, a fleet it dubbed "Prime Air." But to build a network to rival FedEx, UPS, and DHL, Amazon will have to at least double what it's already spending, Roberson estimates. (More stories.)

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