Amazon formally launches new Northern Kentucky air cargo hub

Seattle-based global e-commerce titan Amazon said today that its Amazon Air Hub operations at the Cincinnati/Northern Kentucky International Airport (CVG) have formally kicked off.

Amazon has been planning and building out operations for this $1.5 billion investment over the last four years, and it said that this hub will serve as the central hub for the for the Amazon Air U.S. cargo network, “facilitating the rapid transport of customer packages across the country. And it added that this investment will result in creating 2,000 jobs, for people from various backgrounds, for positions involving load planning, management of package sortation, and robotics technology.

The hub includes an 800,000 square-foot sortation building that resides on a 600 acre-plus campus comprised of seven an expansive new ramp for aircraft parking, and a multi-story vehicle parking structure, according to Amazon. And it added that the sortation facility features the robotics technology to move and sort packages—including robotic arms and mobile drive units that transport packages across the building—miles of interlinked conveyors, and ergonomic workstations that support a comfortable work environment for employees. The building will also feature a solar rooftop scheduled for installation over the next year, with all energy generated from the panels feeding directly into the electrical grid of the local community, it noted.

“Wonderful communities and diverse teams like this are the heart and soul of our operations,” said Vice President of Amazon Global Air Sarah Rhoads. “We’re excited to get rolling in Northern Kentucky, and we’re thrilled to employ thousands of fantastic people from the area in this next-generation, highly sophisticated facility that will connect our air cargo network for years to come.”

In a blog posting, Rhoads wrote that ground was broken on the Amazon Air Hub at CVG, explaining that the centrally located hub is ideally suited to more closely connect Amazon to customers throughout the U.S.  

“Last week, our team officially began operations at the site and welcomed the first of over 2,000 dedicated Amazonians who will bring this $1.5 billion investment in the Northern Kentucky region to life,” she commented. “As operations started, we celebrated the arrival of the first of many of our Amazon branded aircraft onto our brand-new ramp. By the end of the year, this facility, which spans over 600 acres, will operate a dozen flights per day and process millions of packages every week.”

In January, Amazon announced it has taken significant steps to expand its growing transportation fleet, purchasing 11 Boeing 767-300 aircraft. This marked the first time the company has purchased aircraft, as it has traditionally procured airfreight capacity through leases.

The company said that seven aircraft were purchased from Delta, with the remaining four from WestJet, adding that these aircraft will be part of Amazon’s network by 2022. 

Amazon Air’s fleet expansion comes at a time when customers are relying on fast, free shipping more than ever, noted an industry observer, adding that these fleet additions will ensure added capacity in Amazon Air’s network for years to come. What’s more, the observer noted that Amazon is constantly assessing its transportation fleet and network to determine what it needs to support fast, free shipping for customers.

And in June 2020, Amazon announced it is leasing 12 Boeing 767-300 converted cargo aircraft from ATSG as part of an initiative to meet changing customer needs through the investment in ways to provide fast and free delivery.

Company officials said that the addition of these 12 aircraft join its existing fleet of 70 aircraft and brings its total network to more than 80, with one of the new aircraft coming to Amazon Air cargo operations in May and the other aforementioned 11 scheduled to be delivered in 2021.

A May 2020 report issued by the Chaddick Institute for Metropolitan Development at Chicago-based DePaul University observed that Amazon Air is focused on increasing its air cargo presence in various ways, including:

• putting more emphasis on cargo-only airports than most other package-shipment providers;
• becoming more oriented toward daytime flights and point-to-point routes than FedEx and UPS; -expanding its fleet to 70 airplanes by 2021 and could grow to 200 planes in 7-8 years;
• making Cincinnati (CVG), Chicago Rockford, Ontario, Tampa, and Wilmington (OH) focal points; and
• creating a CVG megahub that greatly boosts its potential to be a multi-purpose delivery provider

“The opening of the new facility will increase competition for workers in a region rich with warehousing facilities, as well as with the UPS air hub in Louisville, which is about 100 miles to the south and with DHL whose major America's air hub is also located at the Cincinnati/Northern Kentucky Airport,” said industry analyst Cathy Roberson. “In addition, there are questions as to how this may impact Amazon's relationship with DHL. While the facility was under construction, DHL was contracted to provide several services including sorting operations and ground handling for Amazon’s network. However, it's likely the two providers will continue to work together in some type of capacity on other projects and needs.”

Jerry Hempstead, president of Hempstead Consulting, explained that with Amazon currently uses the DHL hub to do their sort during the day, DHL will soon most likely lose that revenue stream as Amazon will have its own sort.

“The big problem right now is DHL is hiring now for peak, and Amazon needs 2,000 people for the sort,” he said. “Well, both are having difficulty finding enough people. Amazon has quite a few additional planes coming on in the next two years as well. Covid has [benefitted] Amazon with an acceleration of online purchasing well beyond their original forecasts.”