CTR is absolutely-correct. There is still so much misunderstanding in the media over what Amazon is doing, and they are probably happy for it to stay that way. The difference between the Amazon model and the Fedex/UPS model is substantial.

Fedex/UPS pick up the package at an Amazon (or any client's) distribution center, take it to their local station, organize it, truck it to their plane (or put it on a line-haul trailer for ground), sort it at their hub, put it on another plane (or line-haul trailer), take it from the destination airport to their local station, and deliver it from the station to the home (the "last mile")-- all on their own vehicles and with their own people. The package is out of Amazon's control from the moment it leaves the dock at Amazon's Distribution Center. Even last year, during the surge, a whole lot of Amazon packages got on a FedEx or UPS trailer at Amazon and sat for days near the origin FedEx/UPS/SmartPost station before being unloaded and inducted into the network. It's this kind of bottleneck at the carrier, among other things, that Amazon wants to avoid by doing the line-haul itself.

Starting a few years ago, Amazon developed an in-house contract ground line-haul network. Amazon-contracted tractor-trailers would pick up packages from Distribution Centers as far away as a few hundred miles, and take them to newly-built Amazon Postal Sorting Centers near the destination, where Amazon people would sort them by zip code at lightning speed, and deliver them during the wee hours to post offices who would do the "last mile". The packages were in Amazon's control until given to the destination Post Office. A whole lot of Amazon 2-Day and even Next Day in the Northeast moves this way. The last mile is also sometimes done by local carriers like OnTrack, Lasership, etc. Recently, organic Amazon-branded delivery has also been added. Where Amazon is rolling out Amazon Fresh to more suburban communities, they are having the Fresh trucks initially also carry Amazon packages to offset the low initial Fresh volume on those trucks.

The new Prime Air air component works (at least in part) this way: Amazon builds pallets of packages at or near the origin Amazon Distribution Center. The pallets are built based on destination in the Amazon network. They get on the ATSG aircraft near their origin, and are flown to the destination airport, perhaps with a cross-dock move at ILN (on most routes, but not on ABE-ONT, for example). From the destination airport, Amazon trucks take the pallets to, for the most part, Amazon Postal Sorting Centers, where they are sorted by destination post office just like the Amazon Ground packages are.

The air component is just a layer that allows packages from longer distances to be injected into the existing ground delivery network that Amazon already has (and is expanding).

So, in my case, the other day I received a package that started at an Amazon DC outside of Tampa, and was put on a pallet with other NY-area packages. That pallet got on an ATSG flight to ILN, was cross-docked to the flight to ABE, and was moved by Amazon truck from ABE to their Avenel, NJ Postal Sorting Center. The pallet was broken down at Avenel, any my package was sorted for delivery by Amazon to my local post office, where it was delivered to me by my mail carrier along with a package that had started at an Amazon DC in Delaware and come to Avenel by Amazon line-haul truck.

There is no "sorting" of packages at an intermediate point the way it is on Fedex or UPS, where they get out of a can, get sorted at MEM or SDF, and get put back in a new can to destination. Because Amazon has such huge volume, it can build full pallets by destination station at the Amazon origin, eliminating a costly intermediate sorting step.