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Amazon purportedly running secret air cargo operation called 'Aerosmith'

AN in-depth report by online magazine, Motherboard, has suggested that giant online retailer Amazon may be involved in a secretive air cargo operation based in Ohio, giving credence to the e-commerce company's ambitions to enter the shipping industry.

According to the report, "Aerosmith" was launched in September by an unknown corporation and is run by the Ohio-based aviation holding company Air Transport Services Group (ATSG), which operates the location on behalf of the nameless company.

The mystery company has leased four Boeing 767s from airlines, two from ABX and two from Air Transport International, Motherboard was able to confirm with ATSG spokesperson Paul Cunningham, the Business Insider reported.

Wilmington Air Park, where the secretive operation is working out of, features two large runways and eight industrial sites and was abandoned by German shipping company DHL in 2008 when it found it couldn't compete locally with giants FedEx or UPS.

FedEx, UPS, and DHL all denied they were behind the Aerosmith project. However, Amazon gave the following statement to Motherboard without denying its own involvement: "We've long utilised air capacity through a variety of great partners to transport packages and we expect that to continue."

Logistics trade publication DC Velocity reported In March 2014 that Amazon was looking to gain more control over its fulfilment infrastructure by revamping its delivery network and to better control its increasing transportation costs.

An anonymous source told DC Velocity in October that Amazon was recruiting "a high-level executive team" to set up its own transportation network in 2016 with the aim to get the Seattle-based company's packages to a customer's door within 90 minutes to two-hours.

This was followed by someone who claimed to work for Amazon hit up the Airline Pilot Forums claiming that it was a "fact" that Amazon was planning to take on FedEx and UPS.

Amazon's shipping costs continue to grow: Amazon's net shipping costs jumped from US$3.5 billion in 2013 to $4.2 billion in 2014, according to its 2014 annual report, noted Motherboard.

According to Baird Equity Research: "Amazon may be the only company with the fulfilment/distribution sophistication and scale to compete effectively with incumbent service providers (UPS, FedEx)." The global fulfilment market, it says, has the potential to represent "a $400-$450 billion incremental market opportunity."

While Aerosmith has not been confirmed as an Amazon project, all signs certainly seem to point to the company, the report added.