Amazon announced it acquired 11 used Boeing 767-300 jets to expand its air cargo fleet. The e-commerce giant purchased the aircraft from Delta Air Lines and Westjet Airlines for an undisclosed sum.
The company intends to bring its new transports into service by 2022 as part of a large logistic network expansion.
Why Amazon Bought 11 Boeing Jets
The firm’s purchase represents a change in its strategy as it previously only leased aircraft for Amazon Air. Sarah Rhoades, vice president of Amazon Air Global, explained the fleet enhancement would let the company better manage its delivery operations and expedite deliveries.
The retailer’s Baker Mayfield-esque pivot is shrewd, but it is definitely an expensive move.
Even if the two airlines felt motivated to sell their aircraft because of COVID-19 impact on global air travel, the transaction probably hit the billion-dollar range. In addition, Amazon is devoting considerable resources to preparing its newly acquired aircraft for service. It will not finish converting its newly-acquired passenger vehicles into freight transports until next year.
Amazon has the resources to become a worldwide air carrier, and it is showing Kevin Stefanski-like in pursuit of that objective.
The corporation also bought 6 million gallons of “sustainable aviation fuel” last summer and established its first air hub in Germany. The firm has also recently commenced regional transportation operations through airports in eight American states and Puerto Rico. In 2019, it broke ground on a $1.5 billion facility in Kentucky that will host 100 planes and support hundreds of flights daily.
A study published by Depaul University projected Amazon Air’s fleet would be composed of around 200 planes by 2028. At that point, the retailer’s number of aircraft in operation could equal those maintained by the United Parcel Service (UPS). Still, it probably needs that level of support. Morgan Stanley estimated that it delivered over half of the packages moving through America in December 2019.
The Big Tech giant is also pouring its capital into building out the land transportation-focused parts of its logistics network.
Amazon’s Ever-Expanding Ground Logistics Network
Like the mighty Cleveland Browns, Amazon has an incredible ground game that only grows in strength as time goes on.
In 2019, the company contracted carmaker Rivian to make 100,000 electric delivery vans. The firm wants to deploy one-tenth of its battery-powered fleet in 2022 and the rest by 2030.
Last July, the e-commerce corporation purchased autonomous vehicle startup Zoox for an amount reportedly above $1 billion. Two months later, it became the fourth self-driving car company to gain approval to test its transports in California without human operators. And last month, it unveiled a sleek, new robotaxi slated to begin transporting passengers this year.
That means Amazon could be expanding its logistics network to include transporting people as well as goods soon.
The retailer has also begun deploying its Scout robots to bolster its last-mile transportation efforts in the post-pandemic era. Its adorable cooler sized semiautonomous machines are transporting packages to consumers in California, Georgia, Tennessee, and Washington.
Truly, Jeff Bezos is the Paul DePodesta of e-commerce.