By 24/7 Staff / www.supplychain247.com / December 18th, 2015
Amazon.com, Inc. is about to become a supply-chain powerhouse, the e-commerce retailer is in talks with Boeing to lease 20 of its 767-freighter jets.
Recently we published an article describing “A Mysterious Air Cargo Operation, Amazon.com?”
Now, and as reported by Cargo Facts reported today that Amazon is building its own cargo operation and is in talks with Boeing to acquire up to 20 767-freighter jets to help deliver packages to customers around the U.S.
The Seattle Times also reported about Amazon’s plans on Thursday, but noted that the company is looking to lease jets, not purchase them, because it does not have an Air Operator’s Certificate, among other reasons.
When asked for comment, Amazon.com provided this statement to GeekWire: “We have a longstanding practice of not commenting on rumors and speculation.”
Boeing, meanwhile, did not have comment.
The article from last month noted that a mysterious company, presumably Amazon, was flying four cargo flights per day out of Ohio’s Wilmington Air Park, which previously served as a facility for DHL until 2008.
The mystery company used four contracted Boeing 767s that fly to and from four U.S. airports - Allentown, Ontario (CA), Tampa, Oakland - that all have nearby Amazon distribution centers.
DHL previously employed 7,500 at the airport in Wilmington, which has eight industrial facilities and is a “perfect setup” for Amazon, one source told Vice.
In many ways, opening this type of facility makes sense for Amazon to control the logistics of its shipping network. The company has increasingly shown its willingness to take over elements of delivery with an expanding customer base and demand for speed, as evidenced by initiatives including Amazon Fresh, the “Prime Air” drone delivery plan, its own delivery service in San Francisco, the new Amazon Flex package delivery program, and more.
Earlier this month, Amazon even announced that it purchased thousands of truck trailers to ship merchandise between distribution facilities.
Having more control of the entire end-to-end customer experience would also help Amazon avoid issues it has had with third-party delivery companies like UPS during its busy holiday season.
While not quite as surprising as Amazon’s new physical bookstore in Seattle, running its own cargo operations with jumbo jets and a massive sorting facility would be yet another ambitious project from Amazon. It would also shake up the cargo industry, as Amazon has relied on UPS, USPS, and FedEx to ship its swath of packages for the better part of two decades.
The Seattle Times reported that Scott Ruffin, who joined Amazon in 2013, is heading up the air cargo operation. On his LinkedIn profile, Ruffin’s job title is “Director of Planning and Innovation, Transportation by Amazon” and his job description is below:
Leading the best and brightest to create new transportation and delivery solutions for Amazon customers worldwide. Responsible for delivery model engineering, transportation strategy, and network planning/optimization for Amazon’s largest growing transportation segment covering the majority of Amazon’s customers and encompassing hundreds of millions of packages and billions of dollars in annual spend.
The Times also noted that UPS veteran Kniffen Kelly is also part of the project as the company’s director of “sort center engineering.”
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