Amazon Leasing 20 Cargo Planes to Boost Delivery Network

March 10, 2016

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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.

Amazon has leased 20 Boeing 767 freighters to boost its delivery system. Image courtesy of ATSG.

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.

If Amazon starts making deliveries, perhaps they can deliver packages the right side up! — If Amazon transitions to making all deliveries themselves, perhaps they can deliver packages the right side up! Image courtesy of Shutterstock.

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