
Amazon in talks to lease Boeing jets to launch its own air-cargo business - ourmandave
http://www.seattletimes.com/business/amazon/amazon-in-talks-to-lease-20-jets-to-launch-air-cargo-business/?utm_source=news.google.com&utm_medium=Referral&utm_campaign=RSS_editors_picks_Technology
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ethagknight
Does USPS still operate at a huge loss?

Its a strange subsidy for the US Govt to operate USPS while major portions of
USPS work are paid for or performed by private companies. For examples, Amazon
pays USPS to deliver parcels on Sundays. Does USPS make money providing that
service? USPS pays FedEx handle overnight airfreight in a massive contract
[1]. I'm sure there's others, those are just two from recent memory.

Now Amazon is looking to handle its own inventory load balancing act while
handing off to USPS for the last mile, presumably the costliest portion of
delivery.

I'm not sure I take issue with it, I just find it interesting.

[1] [http://www.bloomberg.com/news/articles/2013-04-23/fedex-
to-f...](http://www.bloomberg.com/news/articles/2013-04-23/fedex-to-fly-mail-
for-postal-service-for-10-5-billion)

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Spooky23
USPS loses money because key republican congressman require that they do
things like over fund pensions, while maintaining grossly unprofitable
services like shipping parcels to Alaska at ground rates. Their universal
service mandate also requires that they do last mile delivery to every
address, so UPS and Fedex dump that work to them for pennies on the dollar.

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wsh91
I love the USPS, but it's not the pensions:
[http://taxfoundation.org/article/troubles-postal-
service](http://taxfoundation.org/article/troubles-postal-service)

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tw04
It's generally considered bad practice to link a conservative think-tank when
trying to explain why someone who has been hamstrung by conservatives isn't
making money.

In the first two quarters of 2015 they lost $2.8 billion. In the first two
quarters of 2015, they had to fund $13 billion in pensions. Pensions are 100%
the issue.

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iask
Tip of my hat to Amazon. It's time someone with balls and money stand up to
UPS and FedEX. I've seen first hand what these folks do to small and midsize
business. $7-$12 address correction fees (these fkrs force you to use their
address systems - so now a correct address in USPS can show up differently in
FedEx and UPS), fuel surcharges even when fuel is dirt cheap, ridiculous and
cumbersome zone charts which 90% of their staff have no clue how to explain. I
could go on.

I can't wait until Amazon decides to start offering the service to the public.

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MarkCole
I'm interested to see if Amazon will go into the carrier business, and force
the others like UPS, DHL, etc to up their game and provide a good service i.e.
packages delivered looking like they haven't been kicked about like a
football.

However as far as I'm aware, this business is also very low margin, so a lot
of room for them to lose money here too.

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Spooky23
Amazon has crazy volumes that give them options to innovate beyond what
UPS/FedEx sorting centers can do.

They can skip the whole hub step and do what Southwest did for passenger
travel. Because they don't need to build a nationwide network, they can cherry
pick the markets that make sense to them.

It's great for Amazon, but awful for everyone else. FedEx will lose, and UPS
will take a body blow, but have more clout and market power.

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bpicolo
How do you figure e.g. UPS doesn't have crazy volumes? They're delivering
everything Amazon would already

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Spooky23
They do, but UPS still has to sort it, right?

Amazon can sort at the origin -- make products roll out of the distribution
centers in whatever order needed to fill the plane, skipping the time & cost.

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ketralnis
Couldn't they do this today? Require that Amazon get it to them in pallets
labelled by zip code

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Spooky23
Zip code stuff has been around for years... I'm talking about optimizing the
packing to ensure that the trucks are packed optimally. I've seen some
references in articles that either said or implied that the level of
optimization available is linked to how much data UPS is willing to share with
Amazon about it's operations.

Given that Amazon uses pretty brutal public critique of UPS as a contract
negotiation / customer sat tactic, and is obviously working on ways around
them, I think the UPS/Amazon relationship has leaned more towards "frenemy"
(vs trusted partner) for a few years now.

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HiLo
And in +10 years, activist investors come in and lament how much more valuable
the shipping business and the e-commerce business really are when separated,
as the legacy network doesn't necessarily fit the needs of the newer one :)

This happens a lot with commodity shipping at least.

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yurylifshits
It can be a very early step towards "self-flying" delivery network between
major US cities.

I wouldn't be surprised if in 15-20 years Amazon / Google / Uber / Elon Musk
are operating a national fleet of electric self-flying cargo airplanes.

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TulliusCicero
Is that practical? Seems to me like the weight of the batteries required for
long-distance flight would make this rather impractical.

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alex_anglin
I don't think that he/she was proposing that the planes be battery-powered.
SpaceX certainly doesn't use batteries for fuel.

