Amazon FedEx, No Worries!
If the recent announcement made by FedEx in which it publicly stated it is no longer doing business with Amazon left any type of mark for Amazon, it looks like it did not phase the global e-commerce bellwether based on an announcement it made on yesterday (see press announcement below).
Why? The answer is that Amazon said it is adding 15 Boeing 737-800 converted aircraft to its fleet through a partnership with GE Capital Aviation Services, whom Amazon already leases five Boeing 737-800s from, which was announced earlier this year.
Amazon said the aircraft will fly out of 20 U.S.-based gateways in the Amazon Air network.
“These new aircraft create additional capacity for Amazon Air, building on the investment in our Prime Free One-Day program,” said Dave Clark, Senior Vice President of Worldwide Operations at Amazon.
“By 2021, Amazon Air will have a portfolio of 70 aircraft flying in our dedicated air network.”
Much like all of its other transportation- and logistics-related endeavors, Amazon has been methodical in arranging things to exactly meet its needs and objectives.
Company officials made that clear in explaining the myriad facets of its Amazon Air operation that was rolled out in 2016, including:
- Advanced algorithms and software used for capacity and route planning through which the Amazon Air operation can transport hundreds of thousands of packages per day;
- Advanced algorithms and software used for capacity and route planning that enable the Amazon Air operation to transport hundreds of thousands of packages per day; and
- The opening of new air facilities in 2019 at Fort Worth Alliance Airport, Wilmington Air Park, and Chicago Rockford International Airport, with the main Air Hub at the Cincinnati/Northern Kentucky International Airport set to open in 2021
Watch the video (above): Amazon breaks ground on $1.5 billion Prime Air hub at CVG
The working thesis for Amazon internally growing its air operations, going back to May 2016, has been to ensure air cargo capacity to support one and two-day delivery for customers.
And in looking at reporting in Logistics Management at the time of that May 2016 announcement, the air network was also part of the company’s intention to potentially up its logistics and supply chain operations presence to meet high levels of demand as e-commerce activity continues to increase.
Well, fast-forward three years later and it quickly becomes clear that has indeed happened, to say the least. Another interesting tidbit from that May 2016 announcement covered in Logistics Management is the following:
“UPS and FedEx handle the bulk of Amazon’s deliveries, but Amazon has attempted to take more control over its supply chain after a mixture of bad weather and a last-minute surge in e-commerce orders delayed deliveries during the crucial holiday season two years ago.”
No matter how you look at it, it is crystal clear Amazon has had a well-thought-out plan it has stuck to, one which has resulted in being in control of a majority of its assets both inside and outside of its many facilities.
Read: Why Amazon Is Bringing Logistics In-House
And while it no longer has a partnership with FedEx anymore, with FedEx formally pulling the plug on Amazon’s business, Jerry Hempstead, president of the parcel consultancy Hempstead Consulting, noted that is not what constitutes a big deal for Amazon.
“This is why Amazon is not concerned about being fired as a customer by FedEx,” he said.
“This plan has been in the works for some time. “When you have your own lift, why do you buy a lift from a third-party like FedEx. This is just an addendum to the FedEx firing Amazon story.”
With Peak Season beginning in earnest in the coming weeks, Amazon looks to be as prepared as it ever has been.
And that comes with the company continuing to write and re-write its transportation and logistics playbook in a way that meets the needs of Amazon, itself, as a company, and, of course, to maintain its core focus on delighting its customers.
Amazon Press Release
Continued Growth for Amazon’s Air Network to Expand Prime Fast, Free Shipping for Customers – Adding Fifteen Boeing 737-800 Converted Freighter Aircraft to Fleet
June 18, 2019, at 8:00 AM EDT
Amazon has partnered with GE Capital Aviation Services to lease an additional fifteen Boeing 737-800 aircraft that will enter the air network by 2021
Amazon continues to invest in ways to provide fast, free shipping for customers. Today, at the International Paris Air Show, the company announced a partnership with GE Capital Aviation Services (GECAS) to lease an additional fifteen Boeing 737-800 cargo aircraft. These fifteen aircraft will be in addition to the five Boeing 737-800’s already leased from GECAS and announced earlier this year. The aircraft will fly in the United States out of the more than 20 air gateways in the Amazon Air network.
“These new aircraft create additional capacity for Amazon Air, building on the investment in our Prime Free One-Day program,” said Dave Clark, Senior Vice President of Worldwide Operations at Amazon. “By 2021, Amazon Air will have a portfolio of 70 aircraft flying in our dedicated air network.”
“We’re delighted to support Amazon Air’s dedicated air network,” said Richard Greener, GECAS Cargo’s Senior Vice President. “The capability of the 737-800 freighter will further Amazon’s ability to provide reliable and regional delivery to its customers for years to come.”
Amazon Air’s operation launched in 2016 supporting package delivery to the rapidly growing number of customers who love fast delivery, affordable prices and vast selection. With advanced algorithms and software used for capacity and route planning, the Amazon Air operation can transport hundreds of thousands of packages per day. Amazon will open new air facilities this year at Fort Worth Alliance Airport, Wilmington Air Park, and Chicago Rockford International Airport. The main Air Hub at the Cincinnati/Northern Kentucky International Airport will open in 2021. Since its launch, Amazon’s air cargo operation has invested millions of dollars and created thousands of new jobs at locations across the U.S.
Amazon has launched several initiatives to ensure fast delivery speeds and supply chain capacity for its customers, including its Delivery Service Partner program, Amazon Flex, the company’s mobile application that allows individuals to sign-up, be vetted and begin delivering for Amazon, a dedicated network of over 10,000 trailers to increase trucking capacity and, now, the expanded fleet of cargo aircraft. These efforts join Amazon’s robust worldwide network of more than 185 fulfillment centers where the company uses high-end algorithms, robotics, machine learning, and other technological innovations to increase delivery speeds for customers. Amazon is now bringing the same technological expertise to efforts in the transportation space to increase shipping capacity for customers.
Read the Article: How to Beat Amazon with Parcel Shipping Business Intelligence
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