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Amazon Leasing 20 Cargo Planes to Boost Delivery Network
JT Genter
Contributor
JT is a location-independent digital nomad traveling 250,000+ miles each year with his wife Katie.
March 10, 2016
•
2 min read
Amazon Leasing 20 Cargo Planes to Boost Delivery Network
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Amazon announced this week that it has leased 20 Boeing 767 freighter aircraft for the next five to seven years, beginning April 1. While this isn't a shocking development — after all, very similar plans were leaked in December — it's a major move by Amazon. This should help the world's largest retailer provide stability to its delivery system, while also cutting costs.
Likely Amazon's biggest motivation is helping to ensure timely deliveries. After all, Amazon got a black eye back in Christmas 2013, when UPS delivered a significant number of Amazon packages after Christmas. At the time, UPS specifically cited "the volume of air packages in our system exceeded the capacity in our network." Amazon is looking to avoid that in future years as its sales continue to soar.
Also, this move should save Amazon shipping costs, particularly for one- and two-day deliveries. Amazon spent a whopping $11.5 billion in shipping costs in 2015 — covering a large part of the delivery distance on Amazon's own planes should help cut back these costs.
Think 20 planes won't make much of an impact? As a comparison, FedEx has 363 large planes and UPS only has 237 planes for their massive, worldwide delivery networks.
While this is a significant move, Amazon is only taking control of part of the delivery system. Still, this is a major development for Amazon, which will hopefully make deliveries more stable and timely for consumers. With this change, those Amex fee credits may end up directly covering airline expenses after all!
H/T: Reuters
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- Every year, you'll get 10,000 bonus miles after your account anniversary date. Plus, receive an annual $300 credit for bookings made through Capital One Business Travel
- Receive up to a $120 credit for Global Entry or TSA PreCheck®. Enjoy access to 1,300+ airport lounges worldwide, including Capital One Lounge locations and Priority Pass™ lounges, after enrollment
- Enjoy a $100 experience credit and other premium benefits with every hotel and vacation rental booked from the Premier Collection
- This is a pay-in-full card, so your balance is due in full every month