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Amazon takes wing - mulls running its own air cargo service by February

AMAZON's ambitions to start its own air cargo business may become a reality before by February while it negotiates a lease for 20 Boeing 767 jets, reports the Los Angeles-based E-Commerce Times.

The online retail giant has launched a pilot service in Wilmington, Ohio, where Air Transport Services Group (ATSG) has been managing air freight on Amazon's behalf.

London's Evening Standard reports Amazon has been operating secret flights carrying thousands of packages in and out of the UK for six weeks as it tests its own capacity in the air freight business.

Since mid-November the online retail giant has chartered a Boeing 737 to fly between Poland, Britain and Germany, according to the report.

The plane flies from Katowice in Poland to Luton, East Midlands or Doncaster airports and then back to Poland via Kassel in Germany with flights linked to Amazon's biggest fulfilment centres.

Katowice airport is near its two giant warehouses in Wroclaw, while Kassel is the closest airport to Amazon's two fulfilment centres in Bad Hersfeld, Germany.

Amazon's biggest fulfilment centres in the UK are in Dunfermline, in Scotland and Swansea, in Wales and the closest to London are Milton Keynes and Hemel Hempstead.

Amazon has chartered the plane from German logistics firm DB Schenker and is understood to be looking at extending the trials with further plane charters and taking in centres in Spain and Italy, said the report.

Amazon likely will launch a more robust operation before next month, reports the Seattle Times, eventually acquiring its own jets. For now, leasing is cheaper and it has yet to have an air operating licence.

Amazon's air ambitions may have been inspired at least in part by the events of two years ago, when packages arrived late during the holidays because UPS was overwhelmed.

If Amazon is moving to handle some of its shipping services in-house, the impact on FedEx and others will depend on the nature of its plans, according to principal analyst for Pund-IT, Charles King.

"If the company is developing services that established players don't offer or supplement UPS, FedEx and the UPS offerings, I think the effects will be benign," he told the E-Commerce Times.

However, if Amazon is coming for the throats of the shipping industry's heavyweights, "it could be in for the fight of its life", Mr King said.

"Leasing jets is one thing, but developing the ground-side infrastructure and personnel necessary for safe, reliable delivery is something else," he said.

FedEx and UPS may be up for a fight, but it eventually might embalm and bury the struggling US Postal Service, according to MastaMinds CEO Justin Hamel.

"USPS and FedEx are not only going to take a hit on revenue from this change, but Amazon will most likely reinvent shipping as we know it today, which is a very flawed and dated system," he said. "It will be a win for consumers and a huge L for the shipping companies."

The shipping industry's players aren't the only group that should take note of Amazon's moves. E-commerce rivals may need to begin working out ways to counter the company.

"I wouldn't be surprised at all if Amazon starts delivering seven days a week in all locations with this move, offering one-day delivery to these locations as well," said Mr Hamel.

"This move will put e-commerce competitors in a camel clutch. A lot of companies will be playing catch-up and trying to jump on the Amazon logistics ship."