How much could Amazon gain or lose from its operational air fleet? Can Amazon really be more competent than FedEx and UPS? These are a few questions that might pop up in people’s minds after news of Amazon starting its own fleet of flights to ship orders.
The first ever Prime air cargo plan is announced by Amazon. Though the numbers are in favor of Amazon but the practicality is the questions. The shipping cost of Amazon skyrocketed almost 43 percent as compared to the previous year and does allow it to rent a few planes. And the company might plan on increase its cargo network. 29 percent to 43 percent is the average rise in shipping cost for the company for the year 2013, 2014 and 2015.
The shipping costs went up due to third party sellers and adding to that is the earning from prime membership and Fulfillment by Amazon. A report mentioned the company’s shipping cost for the six months in 2016 is at 44 percent increase as compared to the shipping cost in 2015 which is about 19 percent.
Amazon will effectively save billions of dollars just by cutting out the middleman. The use of its own air fleet can also make the company compete even more efficiently with the competitors.