Amazon Air locations map
Source: Chaddick Institute at DePaul University. Shows only US airports and includes partner airlines.
Over the years, Amazon has built an army of warehouses, shipping centers, delivery vans, and trucks to ensure it can meet its Prime delivery commitment in two days or less.
Another increasingly critical part of the company’s logistics machine is Amazon’s airline fleet, which now numbers 75 planes. The fleet gives Amazon better control over its own packages and enables it to offer even faster deliveries.
It also puts Amazon in direct competition with FedEx and UPS. Analysts have long predicted that Amazon is on its way to becoming a “leading logistics provider” and predict that it may someday carry packages for other companies, not just items in its own warehouses.
The company’s latest air cargo expansion suggests Amazon Air is emerging as a more serious competitor to traditional carriers.
Amazon Air now operates at 42 airports in the United States, after adding scheduled flights to seven airports in the past six months, according to a study released Wednesday by the Chaddick Institute for Metropolitan Development at DePaul University.
That puts 70% of the U.S. population within 100 miles of an Amazon Air airport, up from 54% in May 2020, according to the study.
Amazon Air’s growing footprint allows it to ship packages and inventory to areas a short drive or delivery van from a significant portion of the U.S. population, DePaul researchers said.
Amazon Air’s growing closeness to consumers is critical as Amazon continues to increase delivery speeds from two to one-day shipping. Amazon’s efforts to deliver products to customers at an increasingly rapid rate have resulted in higher shipping costs. Amazon spent more than $ 61 billion on shipping in 2020, up from nearly $ 38 billion the year before, according to CNBC calculations using figures from financial records.
“Amazon Air’s expanded reach has enhanced its ability to quickly move inventory among its multitude of warehouses and sorting departments to enable next day delivery of a wide variety of products to a large portion of the US population.” , according to the report.
Amazon launched its airline fleet in 2016. The company still relies on outside carriers Atlas Air Worldwide Holdings and Air Transport Services Group to transport some of its packages, but it has started to integrate some in-house air cargo operations.
In January, the company announced its first aircraft purchases, purchasing 11 used Boeing 767-300s to add to its fleet of leased aircraft. Amazon’s airline fleet remains a fraction of the size of FedEx, which has 467 planes, and UPS’s fleet of 284 planes, according to data on planespotters.net.
Amazon last month opened its $ 1.5 billion “superhub” at the 600-acre Cincinnati / Northern Kentucky International Airport, which has an 800,000 square foot robotic sorting center. , where packages are sorted by postal code and grouped into trucks before delivery. The hub could handle up to 200 flights per day.
Amazon’s theft activity has grown 17% in the past six months to an average of 164 thefts per day, according to DePaul researchers. Researchers predicted that Amazon would expand its theft operations by an additional 12 to 14 percent, bringing its daily total to more than 180 by January of next year.
Amazon is probably a long way from offering its air freight services to third parties, as handling its own order volume is a full-time job, Joseph Schwieterman, director of the Chaddick Institute, said in an interview.
Sarah Rhoads, vice president of Amazon Global Air, told CNBC in an interview last month that the company is focused on managing its own package volume.
That could change as the Amazon Air network continues to grow, Schwieterman said.
“If they can deliver it to markets where they have coverage and capacity and maybe not try to be everything for everyone, that could be a really good profit center,” Schwieterman said. “The day will likely come when they find their way into the broad segment of business-to-consumer logistics. “
Amazon declined to comment on the report’s findings.