Amazon.com is going to lease 20 Boeing aircraft as the online retailer makes a move toward setting up its own air delivery service.
The online giant is going to lease Boeing 767 freighter aircraft, according to Air Transport Services Group (ATSG), and comes as the company has been testing drone deliveries.
Amazon currently relies on companies including UPS and FedEx to deliver packages to consumers, but is taking moves to manage its own shipping and distribution instead of relying on others.
Amazon’s latest move has taken its toll on these US logistic firms, just weeks after the online retailer sent investors fleeing from UK supermarket shares after announcing a tie up with Morrisons.
UPS's share price fell over 0.6 per cent as markets opened on the news, while FedEx fell over 0.75 per cent.
“We offer Earth’s largest selection, great prices and ultra-fast delivery promises to a growing group of Prime members and we’re excited to supplement our existing delivery network with a great new provider, ATSG, by adding 20 planes to ensure air cargo capacity to support one and two-day delivery for customers,” said Dave Clark, Amazon senior vice president of worldwide operations and customer service in a statement.
The duration of the leases will be five to seven years, ATSG said.
Amazon held discussions with air-cargo companies to lease airplanes and establish its own freight operation last year, with the goal of reducing its reliance on traditional carriers, according to the Wall Street Journal.
ATSG has also agreed to grant Amazon warrants to acquire over a five-year period up to 19.9 percent of ATSG’s common shares at $9.73 per share.