Amazon Considering Starting Own Express Airline

59 Dano

I just want to make friends!
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.

The cost you say they're trying to cut out is the expense of air transport. That cost is still there whether they fly those packages FedEx/UPS or if they do it themselves. Currently, they share the expense of a flight with thousands of other shippers. If they do it themselves, they're on the hook for the entire bill.
 

vantexan

Well-Known Member
The cost you say they're trying to cut out is the expense of air transport. That cost is still there whether they fly those packages FedEx/UPS or if they do it themselves. Currently, they share the expense of a flight with thousands of other shippers. If they do it themselves, they're on the hook for the entire bill.
What % of FedEx volume is Amazon freight?
 

bacha29

Well-Known Member
Vt : you may be on to something. About a decade ago in China, X was delivering their boxes themselves in the city but dumping their rural stuff onto China Post becasue it wasn't profitable for X to head out where the buses don't go.That was until the Chinese government stepped in and put new shipping rules in place. I agree, Bezos wants the easy in town stuff and the money losing rural can go to the ground pounders at USPS and FXG.
 

59 Dano

I just want to make friends!
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.

The crazy idea that you can successfully start and operate an airline that generates no revenue.
 

MrFedEx

Engorged Member
The crazy idea that you can successfully start and operate an airline that generates no revenue.

Who says it won't generate revenue? As for Amazon itself, the philosophy has been to dominate the market and have the profits come later. Bezos has laid the groundwork, and built the infrastructure. He's probably thinking long-term rather than short-term profit.
 

Cactus

Just telling it like it is
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.
Yes indeed. What we are stuck with is a far cry from true leadership.
 

TUT

Well-Known Member
Amazon should do this if they feel it will be better for them overall. Fedex and UPS could also benefit from this as well, this isn't highly profitable business and it will allow higher margin product better service.
 

dezguy

Well-Known Member
Amazon should do this if they feel it will be better for them overall. Fedex and UPS could also benefit from this as well, this isn't highly profitable business and it will allow higher margin product better service.
This is what I don't understand. Amazon just recently started operating at a profit, am I not correct? That was with UPS and FedEx delivering their packages for pennies. Now they want to operate their own fleet of aircraft and take care of deliveries themselves, in turn taking on those costs themselves rather than have us and UPS do it for them.

While I have no doubt there are people much smarter than me over at Amazon who believe this is a sound business decision, I doubt Amazon is going to be able to deliver their own stuff for pennies on the package like FedEx and UPS does.
 

snowcat66

Active Member
Fedex will probably reciprocate by using warehouses all over nation to inventory product like Amazon but already have the distribution network in place
 

Purplepackage

Well-Known 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.

People in rural areas order a :censored2: ton off of amazon, easier to have it delivered than drive 2 hours to a mall or Walmart
 

bacha29

Well-Known Member
A few months ago Amazon announced plans to build warehouses distribution centers nationwide and in locations whereby they only have to ship across no more than 2 shipping zones. It will likely make their business pretty maginal boxes but you don't put anything past Bezos if he can get the board to go along with it. Losing Amazon business will not have as big an impact on Ground as you might think. They'll just go steal some more motor freight from the LTL"s. More back hoe buckets, final drives, living room suites cement mixes, you know all that stuff they make money on but pulverizes your equipment and puts guys in early graves.
 

Fred's Myth

Nonhyphenated American
Who says it won't generate revenue? As for Amazon itself, the philosophy has been to dominate the market and have the profits come later. Bezos has laid the groundwork, and built the infrastructure. He's probably thinking long-term rather than short-term profit.
But, sooner or later, (probably sooner), investors are going to demand a ROI and not just the promise of 'someday,soon'. If the operating profits don't materialize soon, capitalization of Bezos' dreams will dry up. You can't spend your way to profitability.
 

MrFedEx

Engorged Member
People in rural areas order a :censored2: ton off of amazon, easier to have it delivered than drive 2 hours to a mall or Walmart

Yes, but servicing those rural areas is costly to the carrier...low density. Amazon would forget about service to these places and have FedEx and UPS do it.
 

MrFedEx

Engorged Member
And get 0% discount for it.

Maybe. But the real money is in the metropolitan areas where you can bulk-out a 767 with a 100% load factor and deliver the high value small items. I know that you love getting snow blowers and plow attachments for freight, but small and many all packed tight into cans is big $$$.
 

bbsam

Moderator
Staff member
Maybe. But the real money is in the metropolitan areas where you can bulk-out a 767 with a 100% load factor and deliver the high value small items. I know that you love getting snow blowers and plow attachments for freight, but small and many all packed tight into cans is big $$$.
Maybe.

You sure seem to have a lot of admiration for Fred's soul brother.
 
Top