Amazon has essentially changed the way millions of people get packages. Now that they’re in the airplane business they’re even more fascinating to me as a logistics company.
I wanted to share an interesting article that David H brought to my attention. It reveals some interesting tidbits about “Prime Air”. For starters, I wasn’t aware that the number of planes they’re operating had grown to 40. From a cargo standpoint, that’s a lot of lift.
Reuters notes a couple of other interesting points. Amazon’s planes are flying later in the evening than FedEx and UPS. And, they’re a lot lighter, even though they’re full:
Amazon aircraft on a monthly basis handled only between 37 percent and 52 percent of their maximum loads by weight, according to an analysis of cargo, capacity and landing data from the four airports, with supplementary information from tracking website FlightAware.com. By contrast, FedEx and UPS were at 53 percent and 56 percent capacity, respectively, according to U.S. Transportation Department data for the year ended September 2016, excluding weight carried for free.
Flight data shows another way that Amazon is departing from cargo companies’ road map in an attempt of its top goal: rapid delivery.
Using FlightAware.com and similar websites, Reuters tracked the schedules of Amazon contractors and verified with airports which flights were on behalf of the retailer.
Many of the company’s eastbound flights leave the states of Washington and California unusually late at night: its flight from Stockton to Wilmington, Ohio departs close to 2:00 AM Pacific Time (10:00 GMT), for instance. FedEx instead schedules most eastbound service no later than 9:00 PM (5:00 GMT) to ensure arrival at its Memphis, Tennessee hub in time for sorting packages overnight.
The article goes on to note that those FedEx and UPS flights need to head to their sorting facilities. This essentially turns them into “connecting flights” before the packages move on to their final destination.
That means Amazon can leave later and still get packages to the same place at roughly the same time, sometimes earlier.
The Final Two Pennies
I’m not really sure what to make of the data that Amazon seems to put lighter boxes on their planes. They’ve definitely got a sea of data. I’m just a little surprised that their modeling could be efficient enough this quickly to find an edge by carrying lighter boxes on their own planes. In some ways, I could see the opposite being true. It makes sense that Amazon’s agreements with FedEx and UPS being influenced by the weight of packages, even if their rates are rock bottom compared to what you and I pay to ship a box.
Targeting more direct flights that leave later in the evening seems right up their alley. That has the potential to be a huge boon for their business. Delivering packages more quickly than anyone else for very low prices is likely a great way to build customer loyalty.
FedEx and UPS are publicly held companies. If Amazon is starting to put a dent in their profitability, I suspect we’ll hear about it in the 1st quarter of 2017. It’s possible they might report about in for the 4th quarter of 2016. But I suspect they’re still at capacity for the holiday shopping season.
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