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Source: DePaul University’s Chaddick Institute. Displays US airports only and includes partner airlines.
Over the years, Amazon has built an army of warehouses, shipping centers, vans, and trucks to ensure it can meet its Prime promise of delivery in two days or less.
Amazon’s air fleet, which now includes 75 aircraft, is another increasingly critical part of the company’s logistics machine. The fleet gives Amazon more control over its own parcels and enables even faster deliveries.
It also puts Amazon in direct competition with FedEx and UPS. Analysts have long been predicting that Amazon is on its way to becoming the “top logistics provider” and anticipate that one day it could fly packages for other companies, not just for items in its own warehouses.
The company’s recent air freight expansion suggests that Amazon Air is on its way to becoming a more serious competitor for traditional airlines.
Amazon Air now operates out of 42 airports in the United States after adding regular flights to seven airports in the past six months, according to a study published Wednesday by DePaul University’s Chaddick Institute for Metropolitan Development.
According to the study, that means 70% of the US population is within 100 miles of an Amazon Air airport, up from 54% in May 2020.
Amazon Air’s growing presence enables it to ship packages and inventory to areas that are only a short truck or van route from a significant portion of the U.S. population, DePaul researchers said.
Amazon Air’s increasing closeness to consumers is critical as Amazon increases delivery speed from two to one day. Amazon’s drive to get products to customers faster and faster has resulted in higher shipping costs. Amazon spent more than $ 61 billion on shipping in 2020, up from nearly $ 38 billion the year before, based on CNBC calculations using figures from financial records.
“Amazon Air’s expanded reach strengthened its ability to quickly move inventory between its numerous warehouses and sorting services to enable next-day delivery of a huge range of products to a large portion of the US population,” the report said.
Amazon launched its air fleet in 2016. The company still relies on outside airlines Atlas Air Worldwide Holdings and Air Transport Services Group to fly some of its packages, but it has started taking over some air freight operations itself.
In January, the company announced its first aircraft purchases, purchasing 11 used Boeing 767-300 jets to expand its fleet of leased aircraft. According to data from planespotters.net, Amazon’s air fleet remains a fraction of the size of FedEx with 467 aircraft and the UPS fleet of 284 aircraft.
Last month, Amazon opened its $ 1.5 billion superhub at the Cincinnati / Northern Kentucky International Airport, which spans 600 acres and has an 800,000 square foot robotic sorting center that sorts packages by zip code and prior to delivery to be consolidated in trucks. The hub could handle up to 200 flights a day.
Amazon’s flight activity has increased 17% over the past six months to an average of 164 flights per day, DePaul researchers said. The researchers predicted that Amazon will expand its flight operations by another 12-14%, bringing the daily total to more than 180 by January next year.
Amazon is probably a long way from offering its air freight services to third parties, as processing its own order volume is a full-time job, said Joseph Schwieterman, director of the Chaddick Institute, in an interview.
Sarah Rhoads, vice president of Amazon Global Air, told CNBC in an interview last month that the company is focused on handling its own volume of parcels.
That could change if the Amazon Air network continues to grow, Schwieterman said.
“If they can offer it to markets where they have coverage and capacity, and maybe not try to have everything for everyone, it could be a really nice profit center,” Schwieterman said. “The day will likely come when they push their way into the massive business-to-consumer logistics segment.”
Amazon declined to comment on the report’s findings.