TECHNOLOGY

Amazon’s air cargo hub plan takes off

BY Deena M. Amato-McCoy

In a strategic move to bolster its logistics network, Amazon will build an air cargo hub in Kentucky.

The online retailer agreed to a 50-year lease for approximately 900 acres of property from Cincinnati/Northern Kentucky International Airport. The project site—which rivals the size of global hubs of top cargo airlines — is estimated to cost $1.49 billion, ReCode said.

The hub will be home base for the retailer’s leased air fleet of 40 Boeing cargo jets, a program it calls Amazon Prime Air. In addition to supporting the loading, unloading and sorting of packages, the site will also create more than 2,000 jobs, according to Amazon.

“As we considered places for the long-term home for our air hub operations, Hebron [Kentucky] quickly rose to the top of the list with a large, skilled workforce, centralized location with great connectivity to our nearby fulfillment locations, and an excellent quality of living for employees,” said Dave Clark, Amazon senior VP of worldwide operations. “We feel strongly that with these qualities as a place to do business, our investments will support Amazon and customers well into the future.”

Currently, 16 Air Prime planes are in service, and more planes will roll out over time, Amazon added.

When Amazon first entered into lease agreements with its two airplane carrier partners, the company said its goal was to provide Prime members with fast, free shipping. The anticipated air hub is also a strategic move helping Amazon to cut costs — and reliance on third parties — out of its logistics network.

For example, the company recently took on the role of an oceanic freight forwarder. This allows Amazon to book cargo space on its carrier partners’ ocean-faring ships to streamline the transportation of goods to warehouses. The retailer is also testing delivery drones.

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