Amazon.com Inc plans to invest $1.49 billion to build a large air cargo hub in northern Kentucky, state officials said on Tuesday, stoking expectations it may one day opt to directly compete with FedEx Corp and United Parcel Service Inc.
The world’s biggest online retailer has agreed to a 50-year lease for about 900 acres of property from Cincinnati/Northern Kentucky International Airport – close in size to the global hubs of top cargo airlines.
Amazon is handling more shipping in-house so it can deliver packages to customers faster, as well as cut costs and uncertainty associated with relying on third parties. It has said its moves are designed to supplement, not replace cargo carriers.
Analysts suspect it has larger ambitions.
This is interesting. Here in the UK, most of my Amazon packages are delivered by Amazon Logistics, a network of Uber-like drivers-with-vans who work with the company. The only exceptions are very large items (such as TVs), very expensive items (delivered by courier services, such as DPD, which is similar to FedEx and DHL), or small, non-fragile, non-urgent items (such as single books, which are often delivered by the post office.
Amazon has most likely cut their delivery costs a great deal with this system, and I expect to see them start using similar systems around the world. (As far as I know, they’re not using this in the United States, but if so, do mention it in the comments. Also, if you’re in any other country with Amazon, and they have a similar delivery system, mention that too.)
But I suspect there’s more. Just as Amazon Web Services has become the leading source of cloud infrastructure, it’s safe to assume that Amazon, while creating this hub for their own deliveries, will eventually roll it out as a competitor to companies like DHL and FedEx.