The American e-commerce giant, Amazon, is without doubt one of the most innovative companies in the World. Their ability to think ahead and anticipate trends is amazing. Alexa and drone delivery are two great examples of Amazon’s smart and disruptive ideas in recent years.
Amazon services worldwide
Amazon’s latest aim is high, very high, and it is investing millions of dollars to impose its presence in the sector of global logistics. The competition is well established, for example UPS and FedEx, but Amazon is implementing a new delivery system which could become a major disruptive innovation.
Amazon’s huge investments in this area lead us to think that the company doesn’t want to stop here and aims to internalise these services to improve performances and optimise costs.
What are they thinking about? Amazon Air!
The idea, started in 2015, was to create a private airline with the aim of increasing customers’ satisfaction and reducing delivery times and costs.
Amazon’s fleet currently consists of 39 planes and its principal hub is the Cincinnati-Kentucky International Airport. We understand that the company aims to increase the size of the fleet, reaching 70 planes by 2020 and just last year they added 10 new Boeing 767 (767-300), covering over 20 hubs in US!
Despite these numbers Amazon are still far behind the other main logistics companies but it is clear that Amazon’s shipping could still constitute a significant loss for them, since Amazon deliveries constitute between 3% and 7% of their total income on a yearly basis.
What about Amazon’s next steps?
The aim of Amazon is to take control over the “last mile”, delivery of its own products, eliminating the involvement of third parties. The company doesn’t want to replace the giants of logistics but only to manage all the orders of its products internally, aiming to make its delivery chain more efficient.
Amazon will never stop surprising us and we expect that in the near future, it will continue to invest in its own airline. What most scares competitors is not the size of Amazon fleet of planes or how big they will become in the logistics sector but its ability to adapt automation, artificial intelligence and machine learning to logistics. This may lead to improved performances and to new opportunities for the American company.
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