In a report by The Wall Street Journal, it seems that Amazon has finally gotten their hands on a shipping partner in an attempt to gain more control over the shipping and delivery costs of their products. Typically, Amazon has had to heavily rely on third-party shippers for its shipping and delivery costs, such as FedEx and UPS. With this new deal, Amazon could help them build their own transpiration and logistics network.
It looks like Amazon will be leasing 20 Boeing 767 plains from Air Transport Services Group The WSJ says that the partnership will allow Amazon to both control and deliver as much as 15 percent of their shipping and package volume.
It’s believed by analysts that this deal is about reliability and cost savings. By using the normal third-arty shipping services, a number of packages were delivered late over the holidays during he past several seasons because shippers like UPS and USPS had been overwhelmed by the volume of packages. Even though the late deliveries are on the hand of these shippers, it ultimately makes Amazon look bad as a brand.
Because of the increase of Amazon Prime memberships, which has increased and and may number up to 80 million globally, there is additional pressure being put on companies to deliver at an accelerated rates. Based on third-party estimates, Amazon has paid over $4 billion to shipping and delivery companies in 4Q of 2015.
Will the Air Transport Services Group lease deal be the beginning of a bigger Amazon logistics network? Or does the company simply want to provide extra capacity as an insurance policy against the shipping problems they’ve been facing? The answer could be yes to both questions.