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Air Cargo is the New Place that Amazon has Started Flexing Muscles


12/26/2016


Air Cargo is the New Place that Amazon has Started Flexing Muscles
Amazon.com Inc has leased 40 jets to meet the delivery demands from the retail giant's customers.
 
However valued business from FedEx Corp and United Parcel Service Inc. are being taken away from them by the company as the Prime Air planes are flying nearly full with lightweight loads, as reported by Reuters.
 
While keeping costs under control and as amazon.com strives to lure new customers with fast shipping, this is one of Amazon's most important endeavors and is expanding into transportation, from trucks to planes. In order to serve its estimated 35 million to more than 50 million U.S. members of Amazon Prime, a service that promises two-day shipping for $99 per year, the world's largest online retailer is sending more packages, more often, and later in the day.
 
A revenue driver at UPS and FedEx are bulky boxes with goods once purchased in stores, like toilet paper. This is partly because, instead of weight, these companies are now charging customers by boxes' volume. Hence Amazon is able to dodge those rising fees by shipping its own big, light packages.
 
Amazon leased the planes to speed up shipping and to backstop cargo partners during the holiday season, the company has said till date.  In recent years, FedEx and UPS have delivered items late for Christmas.
 
"Our own delivery efforts are needed to supplement that capacity rather than replace it," Amazon spokeswoman Kelly Cheeseman told the media. She declined to comment on eluding cargo airline fees.
 
Supplying its warehouses situated nearby, Amazon's planes fly to at least 10 airports across the United States. Amazon's flights are landing with lower-than-average weight -- meaning it is placing low-density shipments inside the jets but are operating near capacity, officials at four airports said, media reported.
 
According to an analysis of cargo, capacity and landing data from the four airports, with supplementary information from tracking website FlightAware.com, Amazon aircraft on a monthly basis handled only between 37 percent and 52 percent of their maximum loads by weight.
 
According to U.S. Transportation Department data for the year ended September 2016, excluding weight carried for free, in contrast, FedEx and UPS were at 53 percent and 56 percent capacity, respectively.
 
"You're dealing with cargo that's big in dimensions, but in pure weight it's light," said an airport ramp manager in California.
 
While not specifying whether the flights were full by volume or whether they were operated on Amazon's behalf, airports in Tampa and Charlotte reported similar payload data for the carriers contracted by Amazon. Transport experts said that though daily flights only started in October 2016, and Amazon likely is learning the market, a seventh airport outside Chicago said the planes were not full.
 
The remaining airports did not comment.
 
FedEx declined to comment. Steve Gaut, vice president of public relations at UPS, declined to comment, media reported.
 
Rapid delivery is another way that Amazon is departing from cargo companies' road map in an attempt of its top goal, flight data shows.
 
The schedules of Amazon contractors and verified with airports which flights were on behalf of the retailer were tracked by the media using FlightAware.com and similar websites.
 
(Source:www.reuters.com)