Amazon Air Could Reach Parity with UPS By 2027 or 2028, Study Finds

Amazon Air is projected to have 200 cargo jets by 2027 or 2028, bringing it close to parity with UPS based on the latter’s current fleet, according to a study from DePaul University.

The study, from DePaul’s Chaddick Institute for Metropolitan Development, said Amazon Air has grown to 42 planes since its launch in 2016, with plans to expand to 70 by 2021, which at that point would put it on parity with DHL. The study estimates Amazon’s express service is making 100 flights per day domestically.

At Amazon’s main air hub in the Cincinnati are alone, 100 planes could be operating in the near future, the study states.

“Although (200 planes in 7-8 years) is only a projection—the company has not to our knowledge made known its long-range plans—this estimate appears to be a conservative one,” DePaul noted in its study, citing the estimated expansion of the Cincinnati hub, which may eventually “account for only a minority of flights.”

The tremendous growth is being spurred on by Amazon Prime’s estimated 150 million members as of January 2020, 112 million of whom are in the U.S. The subscription service began promising one-day fulfillment, up from two days, in 2019, which of course has been rolled back due to COVID-19 demands. The pandemic and the massive order volume flowing through Amazon has also “accelerated the carrier’s expansion,” the study notes.

DePaul’s team also found that Amazon Air is currently configured to support mostly second-day delivery, which doesn’t require flights departing in the middle of the night. It also concluded Amazon Air’s network is primarily configured to handle its own volume, due to a limited number of destinations. Thus it’s set up to save costs by lessening reliance on UPS and FedEx, not competing with them.

“In just three years, (Amazon Air) has become a major component of Amazon’s overnight and two-day delivery business” the study noted. “Amazon Air complements the retailer’s massive ground-based shipping network, which by one estimate now surpasses 20,000 trucks.”

Amazon Air has large sorting facilities at several airports including ones in Chicago, Ontario, CA, Tampa and Wilmington, OH. The DePaul study notes they are all adjacent to FedEx and UPS sorting centers, “creating logistical synergy. If Amazon can’t ship you a product by the promised deadline using its own trucks and planes, the package can be turned over to one of the integrators or USPS.”

In fact, location of Amazon Air hubs close to the company’s own sortation and fulfillment centers is a key piece of its logistics approach, rather than blanketing the entire country with express air service, the study noted. A total of 170 such facilities are located near the hubs.

While other air express carriers have substantially larger fleets than Amazon, the study notes, they all operate on global networks whereas nearly all of Amazon Air’s service covers the U.S. It touches all 50 states and also has service to Inchon, South Korea. FedEx is the largest express service at 463 planes, followed by UPS at 275 and DHL at 77. Amazon is now deemed a mid-sized cargo carrier, according to DePaul’s report, with a fleet that has surpassed smaller global carriers including CargoLux with its 27 planes and Lufthansa Air Cargo with 13 planes.

The study said Amazon delivered an estimated 2.3 billion packages in the U.S. in 2019, mostly orders from third-party sellers. That was contrasted with the 3.1 billion delivered by FedEx and 4.7 billion handled by UPS, and topping them all 6.2 billion from the embattled U.S. Postal Service.

You can access the DePaul study here.

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