Amazon NOT starting it's own airline.
 

Sorry to dash the hopes of those at carriers seeking to escape the clutches of DHL, but it looks like Amazon isn't going to start it's own airline and was just supplementing it's shipping needs for peak.


from Air Cargo World:


E-commerce giant Amazon has provided clarity on its moves into airfreight and other cargo transport modes, saying it is not looking to take on existing logistics operators.
Over the Christmas period Air Cargo News reported that Amazon had chartered aircraft in the US and Europe in order to move cargo across those continents.
Some reports even suggested it was looking to charter as many as 20 Boeing 767 Freighters as it planned to set up an overnight US domestic delivery service.
On the shipping side, a Chinese subsidiary registered as a non-vessel operating common carrier (NVOCC) allowing it to block book space on container vessels.
These reports led some analysts to opine that it was planning to enter the world of transport and logistics and take on the likes of FedEx and UPS.
However, the firm looks to have now quashed that speculation, saying its transport operations were only meant to cover the peak season rush because its logistics providers had struggled to meet the extra demand in the past.
Amazon chief financial officer Brian Olsavsky said: “What we've found is in order to properly serve our customers at peak we've needed to add more of our own logistics to supplement our existing partners - that's not meant to replace them.
“Those carriers are no longer able to handle all of our capacity that we need at peak. They have been and continue to be great partners and we look forward to working with them in the future. It's just we've had to add some resources on our own.”
However, it has invested in its own trucks to move cargo between its warehouses and source centres.
The moves to charter aircraft came as the company had run into shipping delays over the last few years because of sharp demand increases at the major integrators during the peak season.
Some have suggested that to mitigate the delays in 2015, the integrators had told Amazon they would need to put up prices if they were to meet the demand surge.
Last year, in the US, Amazon ran its own airfreight operation out of Wilmington, Ohio, through lessor Air Transport Services Group (ATSG) and subsidiary ABX.
In Europe, reports said Amazon has been flying five times a week from Katowice in Poland to Luton, East Midlands or Doncaster airports and then back to Poland via Kassel in Germany.
The operation was being run in co-operation with German logistics operator DB Schenker, with a Boeing 737 leased from ASL France.
At the time, sources indicated to Air Cargo News that the charter of the single aircraft was a temporary contract to cover the peak Christmas period.
Therefore suggestions that the e-commerce giant is set to launch its own ongoing air cargo operation on the back of the temporary service appeared to be purely speculation.

I am flying an Aerosmith flight tomorrow morning. Seems a little past peak season....

^^Okay, it that picture really funny, or have I just had way too much to drink?

"Going... Down"?
So Amazon is not taking over the world. Damn. I just can't wait for "peak" again!

Leaked documents about Amazon's global logistics business - Business Insider...9Feb2016

Big move right there.

"Colin Sebastian of Baird & Co. believes Amazon is gearing up to create an in-house logistics department that would allow it to take full control of its fulfillment process and bypass its current shipping partners.

Amazon may be the only company with the fulfillment/distribution sophistication and scale to compete effectively with incumbent service providers (UPS, FedEx), Sebastian wrote in a recent note."

Remember this:

https://www.youtube.com/watch?v=_PV0vWjoY8M

DHL had the world wide network, experience, and the consensus was they were going to put a huge dent into the US market. They didn't.

I don't scoff every start up, and businesses grow and evolve. Part of Amazon's success has been being able to work around brick and mortar businesses and reaching directly to the consumer. I have an account there, and appreciate the convenience. The amount of moving parts and regulation, however, in a transportation company means I think there are issues and problems UPS and FedEx have long since smoothed out that Amazon will have to overcome. I'm not saying they cannot. I am saying I don't quake in my boots for my job must because some financial writers who worship Amazon think its automatically going to be a success. I use an Ipad, not a Kindle. I use an iphone, not a Fire smartphone. Amazon should be respected for their size. They are not flawless, however, and have stumbled in many areas. I think this move is largely a huge negotiating ploy to lock in long term shipping discounts. Even if they lose some money contracting boats and other shippers if it forces UPS and FDX to hold the line on rates for their services then Amazon still can win something.

Dude this makes no sense at all! Amazon is going to spend a ton of money setting up a logistics company just to get discounts from Fedex and UPS???

Except Amazon isn't competing against FedEx/UPS for retail customers only for its own packages. Question is whether an internal distribution network that operates at cost is competitive with what brown and purple have to offer?

Keep in mind one of the largest trucking companies in the US is Wal Mart. They are not competing with other trucking companies just have to be cheaper than farming all that freight to other companies. Plus they aren't operating as a common carrier, simply moving their own stuff around.

This is an important point.

How much money have they spend?

Albeif15 makes total sense.

When I saw "727574dvr" OP in Amazon Prime Air thread back in Oct. 2015, I thought the "worlds largest within 2 years" claim to be grandiose.
However, a subsequent post stating that the idea was to "stop using brown and purple for our deliveries" to be a more achievable goal. Don't forget that UPS used belly freight for the longest time before setting up the multiple contractor business model out of KSDF in the early 80's, and ultimately current model in 1988.

I don't think losing ~10% of business will adversely impact a Captain in a junior base (FDA), either. Just that your boat won't be rising as fast as you originally thought it would. How well it raises other boats remains to be seen. I know that an acorn doesn't become a big oak tree overnight, yet also that oak trees got their start as a small acorn.

PS- Has anyone noticed that "727574dvr" has been pretty quiet since October ?

Yeah. To their own huge network of brick and mortar stores where customers drive from miles away to go shopping. Is that what Amazon is intending to replicate?

In a way. Currently Amazon uses FedEx and UPS to deliver to regional post offices and then the USPS does the last mile delivery. Amazon won't need to build infrastructure to get a package to every home in america just to a handful of post office sort facilities. The airplanes and semi truck network they propose will do just that. Take a state like Arizona for instance: Amazon flies a 767 to Phoenix where it gets unloaded into semi-trucks which then deliver to the various major post offices throughout the state overnight. The next day the USPS delivers the packages along with the daily mail service. All Amazon had to worry about was a couple airplanes and truck trailers and they've replaced UPS/FedEx for their deliveries to an entire state.

Amazon's bread and butter is massive distribution centers - which are a hell of a lot cheaper to build, stock and operate (to say nothing of regulatory compliance) than a fleet of widebody airliners.

Have you ever actually observed the UPS/FedEx sort operations at individual stations? Or the infrastructure required to facilitate the whole process at each station? I guess the hope is you can move whole containers of packages off an airplane, directly onto a truck and drive them to the local post office to sort and deliver. Because the Post Office has an amazingly efficient and under used sorting and delivery system at the local level... Especially during the holidays which seem to be the primary reason Amazon is looking for other options...:confused: I just don't see it happening.

More to think about:

Amazon-FedEx: Crazy or Worth Considering? - Bloomberg Gadfly

According to a bunch of other posters, Amazon has hired a lot of logistics people away from UPS.

Just been quietly reading, we've even had some business reporters on here trolling as pilots looking for inside info, which I have not given. Trust me, these guys at Amazon are for real; never tell them what they cannot do. They will bet the farm to prove everyone wrong. They have made some mistakes occasionally over the years, but remember, this is a company less than 20 years old. Incidentally, their Fulfillment Center in CAE is twice the size of the UPS hub in CAE, and bigger than the FedEx hub in IND. FWIW... Happy Motoring and Cheers.

So Amazon decided to hire people that were a part of ups's biggest logistical failure in the past 3 years to lead Amazon logistics. ...Now that's some funny s...t you don't see everyday; )

The F Sort at ILN is nothing but a shell and as the article leads one to think its a turn key operation, sorting wise it is not. DHL sold all the belts and sorting equipment to UPS.

Not hard to be bigger than the UPS "hub" in CAE since there isn't one.

Amazon IS starting its own airline. It will surpass UPS and FedEx within 5yrs.

Is this the statement you are looking for?

There used to be one there, however, it is still quite a good size sort facility, and for some reason they fly a tremendous amount of flights in and out of CAE. I don't know Blender, you tell me. Just curious.

CAE was a regional sort in the old days...before as much volume as possible was brought into Louisville Inditucky Standiford Galactic International World Port.

The facility is still there, but it only gets something like 5 flights a day. DSM, DEN, PHX, MCO and a handful of other non-sort cities see as many or more planes as Columbia does.

Some people do not realize the size and volume of real sort facilities at Fedex and UPS.

Amazon already started an airline. They just added more aircraft. Will it keep getting bigger, or will it stop...that is the question.

Started an Airline?? They have used ACMI carriers to transport Amazon Products, but I don't think you can consider this as starting an Airline.

I guess I started an airline. Hired them to fly me from MEM to DFW. I'm really proud of the American flag on the tail. :rolleyes:

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Hmmm..... Amazon confirms plans to build an air cargo network in Wilmington - Story

"After months of speculation, Amazon confirmed it is leasing 20 planes and contracting with Air Transport Services Group Inc. to operate the cargo network."

This is great news for the 2 Airlines (ABX AIR & ATI) who will be doing the flights for Amazon. Amazon may also purchase up to 20% of ATSG stock.

This is not good news for the air cargo industry, because it moves a significant volume of freight from first-tier carriers to third- and sub-third tier carriers. That won't affect UPS or FedEx's bottom lines by much since it's already heavily-discounted, but it will have a direct impact on the amount of flying done by their pilots. It will also increase the pressure to drive down wages at both of those companies, which, in-turn, may have severe repercussions among the ACMI carriers that will be flying that work.

Under the current administration and for at least the foreseeable future, Amazon has no incentive to bring it's airline ops in-house. None. And being a perma-temp flight crewmember for Amazon isn't going to be the panacea some people seem to think it's going to be, either. Good luck, guys......

Your lack of knowledge of the situation strikes again. UPS and FedEx will be welcoming this news as it will remove high density, low margin volume from their networks and free up space for much higher yielding volume that they had to previously turn away as the contractually guaranteed Amazon volume got priority.

As for wages, this will have no effect on FedEx and UPS but will have a huge impact on ATSG. ABX and ATI will now see themselves as peers of FedEx and UPS and not as a traditional ACMI. Therefore, they will be wanting a new contract that's comparable with FedEx and UPS.

ACMI=perma-temp. The FedEx/UPS pilots are not going to get pressured into lower wages because of Amazon sending some of their freight and flying to an ACMI carrier. ACMI crews gotta make groceries too!

Very true. This will put huge pressure on Amazon and ATSG to pony up and pay their pilots like FedEx and UPS.

Yeah, just like DHL contractors get