Amazon is rapidly expanding its air fleet to handle more of its own shipping

Amazon is rapidly expanding its air fleet to handle more of its own shipping


Amazon is becoming a player in the logistics and shipping industry.

That's what analysts think about the recent expansion of Amazon Air to include 50 planes and several new regional hubs, including a $1.5 billion hub opening in northern Kentucky in 2021.

According to Wolfe Research, the e-commerce giant is now handling its own shipping for 26 percent of online orders. In a December press release, Amazon said that it can "transport hundreds of thousands of packages per day" with its new "dedicated air network" and that its fleet of planes make "two-day shipping possible almost anywhere in the U.S."

 

"Amazon is looking to become a logistics company in their own right," said Ravi Shanker, Morgan Stanley's North American transportation analyst. "We think that Amazon will be a top logistics provider, whether it's in trucking or in air, in the coming years. I think the question is just how quickly they will ramp that operation."

Amazon is even acknowledging the importance of this business to investors: In its 2018 annual financial filing released earlier this month, it listed "transportation and logistics services" among its group of competitors for the first time.

Amazon's shipping costs jumped 23 percent last quarter, reaching a record $9 billion. It spent $27 billion on shipping in 2018. The more of these steps Amazon can control itself, the more it can control the costs. Read more




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