While Amazon's desire to use drones to deliver packages has yet to materialize in a tangible service, the company has taken to the skies in a more conventional manner.
In deals inked with Atlas Air and ATSG (Air Transport Services Group) earlier this year, Amazon gained the capability to fly up to 40 dedicated cargo planes over the next two years. While 11 planes have already been put into service, the first plane to sport Amazon's Prime Air livery, a Boeing 767-300 dubbed 'Amazon One', was unveiled at a media event this week.
Given the scale of its operations, Amazon's fleet of leased planes will allow the company to better control its cost efficiency and delivery performance. In an interview with Recode, Amazon Senior Vice President of Operations Dave Clark said:
You can almost think about the difference between commercial flight and private flight.
We have the ability, with our own planes, to create connections between one point and another point that are exactly tailored to our needs, and exactly tailored to the timing of when we want to put packages on those routes — versus other peoples’ networks which are optimized to run their entire network.
While its fleet may primarily support timely fulfillment of customer orders, Amazon has the added flexibility to transfer stock between its facilities according to its own specifications and schedule. This would enable Amazon to handle demand spikes for products while reducing the amount of excess stock sitting in warehouses around the US.
The move may be cause for concern for both FedEx and UPS, given Amazon's reliance upon them as shipping partners and the popularity of Amazon Prime.