Amazon Rumored To Be Expanding Its Delivery Service

Freight airline firm Air Transport Services Group Inc. ATSG has ramped up its flight activity in what many believe is an expansion of the company's partnership with e-commerce giant Amazon.com, Inc. AMZN.

Neither company has confirmed the speculation, but because the new seven-day-per-week flights travel to and from destinations near Amazon's major U.S. distribution centers, many believe the flights are another step in Amazon's plans to expand its own delivery service.

Slowly Getting Larger

Back in September, Amazon ramped up its delivery efforts by starting up a partnership with Air Transport Services Group and commandeering two aircraft in order to conduct domestic delivery flights. The decision to add flights to its budding delivery business gave investors reason to question whether the firm would eventually add "logistics company" to its laundry list of capabilities.

Amazon already has its own fleet of branded delivery vehicles, and the company has also been working to develop delivery drones.

Related Link: Report: Amazon To Begin Grocergy Delivery In India Before April

What Delivery Expansion Would Mean

At the moment, Amazon's delivery service expansion is unlikely to have any impact on companies like FedEx Corporation FDX or United Parcel Service, Inc. UPS because of the online retailer's massive scale.

Amazon is still in need of outside services to ensure its packages reach customers on time, and the current size of its delivery operations is barely enough to make a dent in its shipping needs. However, if its package delivery operations are successful, Amazon is laying the foundation to expand its business further and eventually cut firms like FedEx out of its supply chain.

Not only that, but Amazon could potentially grow its logistics business enough to offer shipping services to outside customers, putting the company in direct competition with its current delivery partners. Image Credit: By Visitor7 (Own work) [CC BY-SA 3.0], via Wikimedia Commons

Posted In: NewsRumorsTravelMarketsTechTrading IdeasGeneraldeliveryFreightLogistics
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