• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • SCB YouTube
  • Login
  • Subscribe
  • Logout
  • My Profile
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Supply Chains in Crisis
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
    • Webinar Library
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » Amazon Looks to Sell Excess Air Cargo Space as Demand Cools

Amazon Looks to Sell Excess Air Cargo Space as Demand Cools

A LINE OF CARGO PLANES SITS AT NIGHT ON THE TARMAC, THE NEAREST ONE BEARING THE PRIME AIR LOGO

Photo: Bloomberg

December 26, 2022
Bloomberg


Amazon.com Inc. is trying to sell excess space on its cargo planes, according to people familiar with the matter, its latest effort to adjust from a rapid pandemic-era expansion to a slowdown in online growth.

The e-commerce retailer, which has a fleet of about 100 planes in the U.S. and Europe, in recent months has hired executives with experience marketing cargo space for airlines. Possibilities include filling empty jets returning from Hawaii and Alaska with pineapples and salmon, according to two of the people. An Amazon spokesperson declined to comment on the plans.

The long-term plan for Amazon Air hasn’t changed despite the current turmoil, said one of the people, who asked not to be identified as the discussions are confidential. The pressure to make money from unused space aboard its jets is increasing as the company looks to boost profits in a period of slower revenue growth, another person said.

Amazon unveiled the air cargo service in 2016, prompting speculation that it would ultimately create an overnight delivery network to rival United Parcel Service Inc. and FedEx Corp. Amazon Air operates out of smaller regional airports close to its warehouses around the country, helping the Seattle-based company quickly move inventory to accommodate one- and two-day delivery.

The company’s ultimate goal has befuddled industry experts, who have written conflicting reports about Amazon’s ambitions. Fast growth in its earlier years and a $1.5 billion investment in a hub at Cincinnati/Northern Kentucky International Airport fueled speculation that the company was ramping up to be an overnight parcel service. Other investors said Amazon remains far shy of larger carriers like FedEx and UPS, which have more planes and more flight connections that don’t overlap with Amazon’s core online retail business.

Demand for air cargo has cooled this year, and is expected to tail off again in 2023. IATA, an airline trade group, projects the sector will generate sales of $149.4 billion, about $52 billion less than 2022 but still $48.6 billion more than in 2019.

Amazon’s flights in September grew at their slowest pace since the start of the pandemic, according to researchers with DePaul University’s Chaddick Institute for Metropolitan Development, who have been monitoring Amazon Air flights since 2020.

Despite slowing demand, Amazon in October announced it would add 10 Airbus A330-300 freighters starting next year through a partnership with Hawaiian Airlines. Amazon plans to also trim its fleet by not renewing some leases for aircraft with Air Transport Services Group, two of the people said.

Even the largest package carriers are tightening belts as consumers resume pre-pandemic spending habits, which takes pressure off the shipping industry. FedEx on Dec. 20 unveiled plans to cut $3.7 billion in expenses next year, with the cost cuts including using digital tools to rebalance flights between company-owned jets and lifts from third-party operators.

Amazon is offering space on its planes, and charter flights, said one of the people. The effort is the latest maneuver to address slowing online sales and a fragile economy that could be on the brink of recession, including subletting excess warehouse space and eliminating an estimated 10,000 jobs.

RELATED CONTENT

RELATED VIDEOS

Air Cargo Retail
  • Related Articles

    Japan Factory Output Falls a Third Month as Global Demand Cools

    Air Cargo Is Moving, Just Not as Much in Air Cargo Freighters as Formerly

    Hong Kong Exports Drop More Than Expected as Global Demand Cools

Bloomberg

BioNTech Expands German Plant as Scholz Vows to Help Pharma

More from this author

Subscribe to our Daily Newsletter!

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • DOCUMENTS BEARING THE INSIGNIA OF US CUSTOMS AND BORDER PROTECTION LIE ON A TABLE

    New CBP Regs Call for Greater Diligence by Brokers in Reporting Security Breaches

    Freight Forwarding/Customs Brokerage
  • A WORKER IN A WAREHOUSE, SUPERIMPOSED WITH GRAPHICS SHOWING SUPPLY NETWORK

    Enabling Intelligent Visibility With Supply Chain Analytics

    Data Management (Big Data/IoT/Blockchain)
  • A HAND TURNS A LARGE, LIGHTED DIAL WITH THE WORD RISK ON IT iStock-NicoElNino-1364371014.jpg

    Measuring KPIs and KRIs for Comprehensive Supplier Performance Management

    Technology
  • GSCMS-Promo.png

    Watch: Introducing the Global Supply Chain Marketing Summit

    Education & Professional Development
  • DEEPLY CRACKED EARTH UNDER A BLUE CLOUDY SKY

    Why Maritime Supply Chains Must Adapt to Sustainability Regulations

    Ocean Transportation

Digital Edition

Scb nov 2022 sm

2022 Supply Chain Innovator of the Year

VIEW THE LATEST ISSUE

Case Studies

  • New Revenue for Cloud-Based TMS that Embeds Orderful’s Modern EDI Platform

  • Convenience Store Client Maximizes Profit and Improves Customer Service

  • A Digitally Native Footwear Brand Finds Rapid Fulfillment

  • Expanding Apparel Brand Scales Seamlessly with E-Commerce Technology

  • How a Global LSP Scaled its Security Program and Won More Business

Visit Our Sponsors

Orderful Yang Ming Alithya
Barcoding Blue Yonder BNSF Logistics
CoEnterprise Data Capture Deposco
E2open GAINSystems Generix
Geodis GEP GreyOrange
Here Honeywell Intelligrated IFM
Infor Inmar Keelvar
Kinaxis Korber Lean Solutions Group 2H
Liberty SBF Locus Robotics Logility
LogistiVIEW Lucas Systems MCA Connect
MPO Nvidia Old Dominion
OpenText ORTEC Overhaul
Parsyl PMMI QIMA
Redwood Logistics Ryder E-commerce by Whiplash Saddle Creek Logistics
Schneider Dedicated Setlog Holding AG Ship4WD
Shipwell Tecsys TGW Systems
Thomson Reuters Tive Trailer Bridge
Vecna Robotics Verity
Verusen
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • On-Demand Webinars
    • Upcoming Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright ©2023 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing