E-commerce giant Amazon recently announced plans to build a $1.5B air cargo hub on 900 acres at the Cincinnati/Northern Kentucky International Airport. While the hub could create as many as 2,000 jobs, that might not be the only economic impact.
The new hub is positioned as part of Amazon’s strategy to speed order fulfillment and improve customer service. It also syncs with a deal that was signed last year for the leasing of 40 Prime Air Cargo Planes, with about 15 of them currently in service. With their own planes and a centralized hub, Amazon would be less reliant on third party shippers and logistics services like FedEx and UPS.
Amazon began to investigate a reduction in its use of FedEx and UPS when larger volumes began producing shipping delays in 2013. The investments in planes and this new hub has many convinced that Amazon’s next venture will be to offer delivery services that cover more than just their own deliverables – essentially becoming a direct competitor to both UPS and FedEx in shipping other retailer’s goods.
Amazon has previously stated that it has no interest in becoming a shipping and logistics provider. However, the company recently began working as a freight forwarder in bringing goods directly from China. This means they reserved space on the ships and took care of the customs work for a number of Chinese retailers – a service identical to those offered by UPS and Fed Ex.
Interestingly enough, Louisville is currently the home of UPS’ headquarters and a 5.2 million square foot air hub that processes over 400,000 packages and documents … per hour.
Construction of Amazon’s 2 million square foot hub is expected to begin later this year, with operations hopefully beginning at the facility by 2022.