Amazon Aims To Expand Delivery Business

Advertisment

Amazon has bolstered the fleet of planes of the company in order to further expand its delivery business as it attempts to go up against cargo airline giants UPS and FedEx.

The US tech giant has agreed to lease an additional of 10 Boeing 767 aircraft in order to expand its Amazon Air network.

The move takes the fleet of the firm to 50 and extends its partnership with ATSG, the airline which operates the planes.

FedEx is the largest cargo airline across the globe. It has more than 650 aircrafts, while UPS, the third largest, has approximately 250.

Last month, Frederick Smith, the chief executive of FedEx, said that the suggestion that Amazon Air could affect its business was “fantastical.”

However, Amazon Air will now be reaching 50 aircraft in a period of less than three years after it was launched in 2016. It is set to open two new regional hubs in the United States of America by 2021.

Dave Clark, the senior vice president of worldwide operations, stated: “Our customers love massive selection and fast delivery, and the Amazon air capacity we are building enables Prime delivery speeds for customers from Seattle, Washington to Miami, Florida.”

He continued: “By expanding the Amazon Air network through our partnership with ASTG we are able to ensure we have the capacity to quickly and efficiently deliver packages to customers for years to come.”

The said move is yet another sign that Amazon is working to reduce its dependence on other delivery firms. The deal is another step in the plan of Amazon to expand its ability to deliver packages itself instead of relying on other delivery services, such as UPS, FedEx, and the US Postal Service.

Dring the first nine months of 2018, Amazon spent $18.6 billion on shipping costs. It increased by 30 percent from a year earlier. Earlier this month, Ravi Shanker, an analyst at Morgan Stanley, estimated that both FedEx and UPS could lose approximately 10 percent of their revenue to Amazon Air by 2025.

4 COMMENTS

Comments are closed.