Dive Brief:
-
Freight airline company Air Transport Services Group Inc. said Wednesday at an investor meeting that it has expanded an air cargo delivery service for a customer and that it would like to continue its services beyond March, according to the Wall Street Journal. That customer, though not named, is widely believed to be Amazon.
-
The company had been operating two aircraft, reportedly for Amazon, since September and is now operating five for the e-retail giant, according to the report. An executive for Air Transport Services Group also said it could add services to Europe and China if the “U.S. e-commerce customer” desires it.
-
Air Transport Services Group is the largest operator of 767 jet freighters, which have been converted to freight service from passenger service. The Wall Street Journal reports that while ATSG didn’t ever name Amazon, it didn’t correct questioners who mentioned Amazon, and that flight tracking out of the Wilmington Air Park in Ohio shows aircraft going to and fro near Amazon fulfillment centers.
Dive Insight:
There are increasingly signs that Amazon is getting serious about striking out on its own in the freight business, by land, air, and even sea.
The small business airport in Ohio that the Wall Street Journal is reporting about also has parcel sorting and other fulfillment equipment and capacity leftover from DHL’s failed entry into U.S.-based delivery services, from which it walked away in 2008, according to the Wall Street Journal.
There’s plenty of evidence that Amazon is boosting its fulfillment capacity, with reports of truck purchases, cargo plane leases, ocean freight, and many types of speedy last-mile delivery, not to mention its increased number of warehouses and even brick-and-mortar stores.
Amazon seizing control of its own delivery could help it tamp down rising costs and give it greater flexibility.
"Among other opportunities, Amazon has 'powerhouse potential' in the large transportation and logistics market, dominated by global enterprises such as DHL and UPS," according to a Oct. 19 report from Baird Equity Research. "Our assessment of Amazon's broadening fulfillment ecosystem, internal domain expertise, and early initiatives with Prime Now to offer third-party delivery suggests there is evidence Amazon may ultimately pursue more comprehensive third-party services.”