Amazon to lease Boeing jets: report says Amazon to launch its own cargo services

Amazon.com Inc is in talks to lease 20 Boeing Co 767 jets in an attempt to expand its delivery operations. Report said that Amazon is aiming to launch its own cargo service.

In a report by Seattle Times (ST), the online retail giant wants to build its own cargo services to avoid delays from carriers like United Parcel Services. It has struggled to keep up with rapidly growing e-commerce. According to the sources to ST, leasing 20 jets would be a significant expansion of Amazon trial operations.

Also the company has approached several cargo aircraft leasers like Air Transport Services Group(ATSG), Atlas Air, Kalitta Air etc, said a senior aircraft leasing company executive told the ST. Amazon intends to kick off its air cargo operations by the end of January 2016.

According to the International Business Times, while posing a direct competition to rival services like FedEx and UPS, Amazon could also deliver for other companies. Other operators will have a chance to store their products in Amazon warehouses, while Amazon will take care of the delivery and distribution all by itself.

Colin Sebastian, an analyst at Robert W. Baird told the sources that, "They potentially will have air-cargo vehicles with extra space. So it makes sense to offer that space (to other companies) to fill it up." He also added that, "Amazon is pretty fed up with the third-party carriers being a bottleneck to their growth."

Live Mint reported that, the online retailer sets the standard for fast, inexpensive delivery in e-commerce and the chief executive officer Jeff Bezos has spent billions of dollars forming a network of warehouses as well as shipping hubs in 69 cities.

Seattle based Amazon ships about 5.2 million packages per day during peak festive and holiday period. Satish Jindel, a logistics consultant in Pennsylvania estimated that around 70% will go through the UPS Postal Services, 15% through UPS and 10 % through FedEx and the remainder through smaller delivery companies.