I remember when you used to go to Amazon.com to buy books.
They built their e-commerce model and expanded to where you can buy almost anything. They’re not a book seller, they’re a seller, and their advantages are ease, reliability, and comprehensiveness.
My first Amazon.com orders. It was March 2001 before I bought anything other than books or music from Amazon.
Of course in building that model there are other businesses they’ve built along the way. They needed huge server capacity to handle the volume of transactions they process, so they built a real capability in managing servers. So they went into the hosting business.
They’re not afraid to try things, and they don’t all work out. Amazon tried selling travel. They’re testing food delivery.
Now it looks like they’re going to become an airline. Amazon is in talks to lease 20 Boeing 767s to start a cargo operation.
Not Amazon’s New Livery
Apparently they’re frustrated by delays at third party delivery companies like UPS, so they figure they can do it better themselves.
Leasing 20 jets would be a significant expansion of an Amazon trial operation out of Wilmington, Ohio, operated by ATSG on Amazon’s behalf, sources said. A cargo-industry source said Amazon expects to make a decision to go beyond the trial run and pull the trigger on a larger air-cargo operation by the end of January.
If it works, they “could deliver for other companies, putting it in direct competition with UPS and FedEx” — a move I suppose depends on the tests, to see whether building out their capabilities here is like servers or like selling travel. Like servers this is flex capacity that they may need at peak holiday shipping time, but once acquired will be underutilized the rest of the year. That gives them the opportunity to build out the business at very low marginal cost.
The current iteration of the Wilmington-based trial features five 767s operated by Air Transport Services Group and planes operated by ABX Air.
Airplane-tracker FlightAware.com shows the two carriers are flying about five times a day from Wilmington to Dallas; Tampa, Fla., Ontario, Calif.; and Allentown, Pa. Amazon has warehouses near each of those airports.
From Nov. 1 through Dec. 17, the two ATSG carriers flew a total 219 flights with 767s from Wilmington. In the same period in 2014, the carriers flew just seven 767 flights from Wilmington.
It’s actually new to me that Wilmington, Ohio is a former cargo hub for Airborne Express and later DHL, which was shuttered in 2008.