Amazon Considering Starting Own Express Airline

Discussion in 'FedEx Discussions' started by MrFedEx, Dec 18, 2015.

  1. MrFedEx

    MrFedEx Engorged Member

    It's all over the news today that Amazon is in talks with Boeing to lease or maybe even purchase 20 Boeing 767 aircraft. This is pretty significant, for a number of different reasons;

    1. Amazon isn't satisfied with the overnight/express (LOL) service it has been receiving from FedEx and UPS. My guess is that it's more unhappiness with FedEx given our well-known operational issues.

    2. Amazon could significantly cut into FedEx Express market share because their distribution network is largely in-place already.

    3. This would be an expensive operation, so is Bezos going to ask for the same exemptions that protect Fred Smith from having a danger of unionization? We already know Bezos is anti-union, but why shouldn't he also have an express carrier exemption and be have his employees fall under the auspices of the Railway Labor Act?

    4. If Fred can't get competent workers for the pittance he pays, how will Amazon do it? Perhaps through profit-sharing or stock options.

    The level of dysfunction at Express currently is laughable. I think Bezos knows that this Peak is an abortion, and that he's going to get some bad press when lots of gifts are delivered late. Plus, the threat of an large aircraft purchase has real teeth, as opposed to the drone plans which are tentative at best. Bezos really could launch and finance an Express-type operation.

    Oh, well. I hope this is causing Fred's ulcer to churn like a tsunami wave. Couldn't happen to a nicer fellow. Like I said, Amazon knows it isn't going well here, and they are planning contingencies. LOFL!
     
  2. Purplepackage

    Purplepackage Well-Known Member

    Everything bezos says is all hypothetical.

    Let me get this straight earlier this year Amazon is getting set to launch drone delivery (a complicated process that needs money and attention)

    Now he's going to buy a bunch of 767s (again a process that will cost billions and he will need to hire mechanics etc etc also needs a huge amount of attention)

    Oh and he has his own "delivery network" going with lazership

    In my opinion it sounds like someone spreading his company way to thin and trying to do everything all at once. Good way to lose a lot of money in a little amount of time
     
  3. outtatime

    outtatime Active Member

  4. MrFedEx

    MrFedEx Engorged Member

    Drones are never going to happen. Airplanes and real and tangible, and Bezos has plenty of funding. In my opinion, he could make it work because he already has the distribution infrastructure. His biggest problem would be hiring a competent workforce, not the aircraft. Plus, this would be for a premium service and market. Bezos is smart enough to know you don't move motor freight on planes. He probably wants control of the process from beginning to end, and he is realizing FedEx isn't up to the task.

    Look at how poorly Express operations are run, and who we have delivering these days. Is it any wonder Amazon is looking at alternatives? Sure, maybe it's just a negotiating ploy, but I don't think so. Our service and reliability are in the toilet, and we have leadership that is only concerned with stock values, not properly running a RELIABLE delivery service. Without Ground to prop-up this piece-of-crap operation, we'd be out of business.

    That is unacceptable to Amazon, and unlike most shippers, Bezos has the means to make something happen. Call me, Jeff!

    Hey, Jeff. I'm available to "make it happen" for you.
     
  5. bacha29

    bacha29 Well-Known Member

    I would think that if Bezos want to operate an air delivery service and be covered under The Railway Workers Act he would have to become a common carrier and haul for everybody. I think he wants to become a private courier . As for the ground transportation end of it, I think he will at the beginning use the USPS as much as possible unitl he can get his own FXG style ground operation going. It might work in the metro areas but out in the ghing weeds, that's another story.
     
  6. 59 Dano

    59 Dano Well-Known Member

    And it looks like we have our winner! The expense of initiating and properly setting up the infrastructure of an air transport operation is insane.
     
  7. bacha29

    bacha29 Well-Known Member

    Expensive? Yes. Doable? Don't dismiss this endevor outright. First there are airline logistics companies that could do the legwork and would gladly do it for someone as well capitalized as Bezos and his company . Secondly Amazon has never actually made any money because everything is going back into expansion and new concepts. As long as investors keep betting on Bezos dumping more money into his stock anything can happen, he could end up getting the last laugh.
     
  8. 59 Dano

    59 Dano Well-Known Member

    They may play around with the idea and find out what a pain in the rear it is.

    Amazon is getting as low a price as can be had to be part of the country's 2 most efficient transport, sorting, and distribution networks. How long do you think investors will enjoy paying for Amazon to jump into the fray and not do it anywhere near as well?

    I say, "Come on in, guys! The water's warm!"
     
  9. It will be fine

    It will be fine Well-Known Member

    It sounds to me like this would be a way to massively expand their prime offerings. Fly products around the country themselves and pass them off to the post office/Ground networks that will do last mile delivery. They don't need a full scale express operation, just enough to cut out the cost of express shipping.
     
  10. Then what? Triple their jets the last two weeks of December?
     
  11. bacha29

    bacha29 Well-Known Member

    IWBF has it spot on. He will start out getting planes with USPS and FXG doing the ground lugging. If it looks good then his dedicated subcontract ground pounders will take over after a few years. For a few years Roadway tried Roadway Global Air using leased cargo planes and resevered cargo hold space on passenger airliners. Would have worked if they could have got their volume up soon enough. Bezos already has all the volume he needs . As for addtional capacity there are enough contract air haulers who have enough extra capacity to haul for him. Remember Bezos has an ego that matches Fred Smith and the cash to make it worth a try.
     
  12. It will be fine

    It will be fine Well-Known Member

    They'll still use everyone. This is just another way to cut down on shipping costs and expand their customer base with better offerings. They don't have to cover the entire country. They can focus on the profitable metro areas and let everyone else handle the sticks.
     
  13. Until they find out everything doesn't go as planned
     
  14. MrFedEx

    MrFedEx Engorged Member

    The big difference is that Bezos already has most of the infrastructure. The fact he is only considering 20 planes limits his market, probably to the major metropolitan areas so he doesn't lose money delivering to Podunkville. Limit the service to LA, San Francisco, New York etc. and make cash where the buyers are, as opposed to the middle of nowhere. He can use FedEx and UPS to deliver the rural stops.

    I'll bet he does it.
     
  15. MrFedEx

    MrFedEx Engorged Member

    Bingo.
     
  16. MrFedEx

    MrFedEx Engorged Member

    I'm not familiar enough with the law to know if Amazon would have to be a private carrier. Bezos could easily price his service so only his target demographic would have ready access to it. There are plenty of real airlines that only service specific cities, and are not considered private carriers. Bezos isn't interested in the weeds.
     
  17. Fred's Myth

    Fred's Myth Active Member

    Why wouldn't he just purchase Fedex, and utilize the vast irreplaceable network of managers that would come with the transaction? After all, Fred's gonna retire someday.:whistling
     
  18. DRAisawesome

    DRAisawesome Active Member

    The problem with Amazon delivering is they would just deliver their own stuff. No way would they deliver for the competition. The next up and coming online business will need Fedex and UPS.
     
  19. MrFedEx

    MrFedEx Engorged Member

    LOL. No way he would want that burden. You could go to the local elementary school and find better talent among the 6th graders.
     
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  20. vantexan

    vantexan Well-Known Member

    Actually Amazon sells just about everything out there that's made by anyone. Remember before Amazon? All the different companies with their own catalogs shipping by UPS and FedEx? Where are they now? They ship their stuff directly to Amazon by truck and let Amazon handle the individual purchases and shipping. If Amazon just handles the metro areas themselves all that profit per package FedEx enjoys goes into Amazon's pockets. If they do this it will be because the numbers have been crunched and it will be worth their while. Amazon has no stores, they have to ship every package through us and others. What better way to keep the profit for themselves than to eliminate the middleman?