
Amazon launches Prime Air, its own dedicated cargo planes to speed delivery - prostoalex
https://techcrunch.com/2016/08/04/amazon-to-launch-prime-air-its-own-dedicated-cargo-planes-to-speed-delivery/?ncid=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29
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GuiA
I can't remember if a friend working at Amazon told me this, or if I read it
online.

Supposedly, Amazon does tons of backend real world optimization on shipping.

Say you, a SF resident, look at a book today on Amazon.com. Based on your past
actions, Amazon knows very well how likely you are to purchase right away, or
tomorrow, etc.

Now imagine the book isn't in a warehouse close enough to you for prime, but
Amazon's data tells them you are much more likely to buy it when you come back
to Amazon tomorrow if Prime is offered.

They'll ship the book to the warehouse in case you come back tomorrow to look
at that book. Of course there's tons more modeling behind it to make sure they
have very accurate estimates of the cost to pre emptively ship vs the payoff
of you buying it, but that's the gist of it.

That was a few years ago, and it blew my mind at the time to think of all the
optimization you can do in shipping to individuals when you're working at
scale.

Amazon is more and more essentially running a CDN, but for the real world.

~~~
djhworld
I find this hard to believe.

But there a again, I don't collect patterns about my behaviour so it could be
true.

Sometimes I look at Amazon and then buy the product elsewhere, say if I spent
3 occasions over a few days looking at a product, does that breach some
threshold somewhere for them to say "we have one on the hook, lets start
moving this to a warehouse near him just in case"

~~~
ergothus
I have no actual knowledge on the topic, but I presume it's not calculated on
a purely individual level. If 100 people live within the range of the local
distribution warehouse are interested in this book, and they say "this one is
87% likely to buy, this one is 43% likely to but..." they can work out a model
that results in very few over-shippings.

But again, I know nothing, other than thinking about it a bit when the patent
app became known.

~~~
wojt_eu
As a result a book about Computer Science would be pre-emptively shipped to a
warehouse near SV and investment book about economy and shipped near NY.

~~~
Roritharr
The patterns in this would be very exciting to know for people who are looking
for their "tribe". It's actually something very hard to find out before moving
somewhere thats not the Valley, what is the main intellectual focus of the
region, is there none?

I missed a lot in my own childhood and upbringing to have people in my
environment that we're or we're in contact with people at the top of their
field, having deeper understanding of something instead of just struggling at
their level.

------
nostromo
> [Amazon] plans to launch its first ever branded cargo plane, the Amazon One,
> at Seattle’s SeaFair Air Show on Friday. The plane is a a Boeing 767-300
> operated by Atlas Air, an existing provider of air cargo services for
> Amazon.com.

Unless I'm missing something, the only new thing here is the paint on the
plane.

~~~
dingaling
> Unless I'm missing something, the only new thing here is the paint on the
> plane.

Amazon has committed to buy a 20% stake in Atlas with options to expand to 30%

[http://www.marketwatch.com/story/atlas-air-grants-amazon-
war...](http://www.marketwatch.com/story/atlas-air-grants-amazon-warrants-to-
buy-20-share-stake-as-part-of-air-cargo-services-deal-2016-05-05)

~~~
imroot
The ownership stake in Atlas with Amazon is interesting to me.

Amazon was contracting with Air Transport Services Group (Airborne Express/DHL
US, for those keeping track at home) for flights into and out of Wilmington
for an air sort program. Amazon must have crunched the numbers on what they
were paying to FedEx and UPS and realized that they could lease planes for
what they were paying for someone else to do the deliveries...

40 Aircraft pushing packages from one corner of the globe to another? This
means that they can cut their logistics costs (or, alternatively, move them in
house from an external vendor, giving them more control) and be able to fine-
tune delivery.

------
throwanem
Only tangentially related, but a useful thing to know about Amazon, and not
something it seems a lot of people are aware of:

If you have problems with a specific shipper Amazon uses, you can contact
their customer support and request they deprioritize that carrier, which has
the effect of weighting it to the bottom of the shipper selection algorithm.
This does not guarantee they'll never be chosen, but it does make it very
unlikely.

In my own case, I had a lot of problems with Amazon's in-house fulfillment,
which here in Baltimore is kind of a trash fire. (Prime Now is great. Amazon
Fulfillment is not.) After an unbroken streak of erroneously failed
deliveries, I spent an hour and a half on the phone with Amazon's support
department, culminating in the discovery that carrier deprioritization is a
thing that exists. Since it's been applied, Amazon Fulfillment has not been
selected to deliver me a package, in contrast to its former high likelihood of
selection. So this appears to be more than just placebo. Others have reported
similar results.

As far as I can tell, in order to obtain this benefit, you need to use the
specific form of words: "carrier deprioritization", or something very close to
it. The specific phrase I've heard them use is "carrier deprioritization", and
it'll probably help if you call it that too; I had several representatives
tell me there was nothing at all they could do, until I happened upon one who
mentioned this phrase. Asking for it by name may save you a lot of time.

If you've had persistent difficulty with a specific carrier, you can do worse
than to get in touch with Amazon customer support and make this kind of
request. Hope this helps!

~~~
kuschku
You do realize you can just select the carrier on the order page? That's kinda
the point of it.

You get a bunch of radio buttons to select if you want to get stuff delivered
via Hermes, DHL, DHL Express, Amazon Prime Now, UPS, etc. each with different
prices.

EDIT: Turns out that feature got removed several years ago. I wonder why.

~~~
germanier
I suppose you talk about German Amazon? Because I don't get such a selection
and never heard of anyone having one - only people complaining that Hermes
lost their orders.

On my order page I get to choose between Prime speed (with a "guaranteed"
delivery date[1]) and standard delivery. Depending on the item they also offer
express, early-morning or same-day delivery but that's about it. Nowhere on
the page are specific carriers mentioned and for the same option different
carriers are chosen (though I usually only use the Prime one).

You can choose to have the package delivered to a drop-off location instead of
your home. In that case you get to see the carrier before placing the order
because they operate those shops.

The only place I have ever seen a carrier selection is the return page where
you usually (but not always) can choose between a Hermes and a DHL label.

Just to satisfy my curiosity I'd like to see a screenshot of your order page.

[1]: Which often was missed until I complained. Now it works magically.

~~~
kuschku
The last time I ordered from Amazon was a few years ago, so they might have
changed it - but I know pretty sure they had such a selection.

~~~
germanier
I haven't seen that for the last 15+ years I use them, just people wishing
that feature in online forums.

Sometimes there is a reason people don't seem to notice an obvious feature in
a software you haven't used for years ;)

------
LAMike
Is Prime Air the Google Fiber of the shipping world?

A way to put a fire under the ass of UPS and FedEx to get cheaper shipping
rates so they can offer lower prices?

~~~
sytse
I think it is more of an AWS, they'll replace most of UPS and FedEx with their
own infrastructure that they'll open up to others later on.

~~~
gregpilling
That would be nice - an alternative to the UPS FedEx duopoly. Maybe they can
push the shipping rates lower than the evil twins set it at now. The two are
doing about 100 billion in business, so it is a large market to go after.

I have been shipping daily with both of them for a decade; it would be nice to
have another choice with national coverage.

[http://www.diffen.com/difference/FedEx_vs_UPS](http://www.diffen.com/difference/FedEx_vs_UPS)

~~~
widowlark
I would hope that Amazon is introducing competition to UPS and FedEx - but its
also possible that they are paving the way for a Vertically integrated
Monopoly. Time will tell, I suppose.

------
manav
My initial reaction was to question their growing levels of vertical
integration, but their volume is so huge that they will probably rival
UPS/Fedex if you included all of Amazons shipments across carriers.

It would cost Amazon 40-50b to buy Fedex, probably twice as much for UPS. If
they really plan to run their own fleet they probably have a plan beyond just
doing Prime deliveries.

~~~
jonknee
The beauty of it for Amazon is they only need to compete in their best
markets. Pure shipping companies have to go everywhere, but Amazon has the
luxury of doing its own delivery only where it is easy and outsourcing it to
legacy shippers where it's not. For example, I could easily see Amazon
delivering directly to large condo/apartment buildings in urban areas.

~~~
was_boring
Only USPS ships everywhere. If you go to UPS/FedEx/DHL, they will tell you
they ship everywhere and take your package, but if they deem your package not
profitable enough they will hand it over to USPS.

The shipping market is incredibly complex with USPS and FedEx actually being
each other's largest customers.

~~~
kuschku
DHL ships everywhere except for the US, where you're right, they do outsource
shipping to the USPS.

DHL used to have its own delivery network everywhere in the US, too, but they
found it hard to compete.

~~~
was_boring
You're right. I should have prefaced my comment as talking only about shipping
in the US.

------
gdulli
The more they innovate on shipping the more I commit to a set of values that
doesn't include instant gratification or equating consumer possessions with
happiness.

A rule of thumb I use before buying something is, do I need it or want it so
much that it's worth more effort to obtain than a few mouse clicks?

If it took a week to ship and I can do without it for that long, can't I do
without it altogether? If I need it sooner, can't I just go get it? I used to
be a huge online shopper but I've rediscovered that going out into the world
is not a chore and it's good to have excuses to do so.

Freeing oneself from Amazon is even better than freeing oneself from Facebook.

~~~
k-mcgrady
While I get your point here's a counter example. I needed a power adapter for
a router urgently. I checked Amazon and they could deliver it by Prime the
next day. I decided instead to go out into the real world and check first. I
went to 3 different small electronics stores near my home - none of them had
it. After an hour of searching/wasting my time I bought it on the Amazon app
as I walked home. I think the point is - it depends where you live. These
electronics stores were small places that doubled as internet cafés and were
run by local people. I would have really had to go out of the way to find a
Maplin/Radioshack/Best Buy kind of store. If I drove a car or lived near a
mall I probably could have gotten the item easily but I live in a city and
small locally run stores are much more common than chains which stock
everything. It wasn't even that obscure an item but without wasting several
hours and spending £6 on public transport Amazon was the only solution.

~~~
gdulli
I still buy online sometimes when it makes the most sense to, as should
anyone, but I think of it as an exception.

What Amazon is doing and I'm commenting on is clearly aimed at promoting
instant gratification and maximizing consumerism.

~~~
dpark
> _aimed at promoting instant gratification and maximizing consumerism_

So it's a retail company. I feel like this statement applies to at least 99%
of retail companies, likely including the ones you're shopping at instead of
Amazon.

------
kev009
Amazon impresses me in solving the problems typical stuffed shirt business
people try to run from. AWS is a great example of tech execution, but courier
services are probably a more impressive accomplishment objectively speaking.

Sustainability in business comes from being good at products and services you
claim to provide. You can game your way up for a bit with good sales and
marketing, but if you suck at execution of products and services, eventually
you will suffer if someone else does marginally better.

Charlatans violating this simple principle is one of the most frustrating
things I've had to deal with in my career.

------
ChuckMcM
_" The plane is a a Boeing 767-300 operated by Atlas Air, an existing provider
of air cargo services for Amazon.com."_

So it seems a bit like they are announcing a paint job on a vendor's plane.
However, the underlying story reminds me a bit about Sears & Roebuck. That
retailer came to dominate the scene by innovating in the logistics of getting
material and goods "most of the way" there so that ordering out of the "Sear's
Catalog" could be just as good as going to the store.

------
6stringmerc
Interesting. I'd love to see Amazon detail how they plan to fuel hedge. It's a
crazy market, to me, but totally fascinating so if they're that bonkers good
with algos & tech, they might have statistically significant results! Well, in
theory. I get the sense though they're not going to get to that point of
direct-employment-purchase and keep things as a sub-contractor / flight
supplier relationship (as noted elsewhere).

------
lutorm
In the meantime, Prime seems to get less and less available for me here in HI.
You go to a product that says "Prime", but then when you attempt to check out
it says "actually, this can't be shipped to your destination". This only used
to happen with large shipments, but lately it's been happening with small
parts as well. It really makes me wonder when it will no longer be worth it to
have Prime.

------
harigov
Amazon's long-term play in this area seems to get clearer everyday. It will
build services to retail what it has done for compute. They are building an
operating system for a retail company. They provide the IT, management
services, logistic services, marketing and advertising services. Eventually if
3D printing catches on, you can even get your stuff manufactured and sold
using Amazon's services.

------
beinstein
This article is pretty misleading. Amazon contracts a 3rd party logistics
provider (who owns the aircraft). They've already been doing this for years.
Only difference now is the plane is painted. A bit click-baity if you ask me.

------
losteverything
A retired air mechanic told me this a while ago. We could not figure out why
they need their own fleet (40 ish planes when they come off existing carriers)
of so many planes

~~~
codeonfire
Hubris. Amazon thinks they can do every other industry better than the status
quo. Let's see what happens when Amazon tries to assign pilot scores and
account for fuel by the liter. Amazon is going to have to deal with real
unions now too.

~~~
liquidise
Hubris? I can name off a number of industries Amazon has, nearly
singlehandedly, disrupted: online retail, shipment subscriptions, low cost
electronics, VPS web hosting, scalable database storage, transactional emails
apis. And this is just off the cuff. I suspect the actual list is far longer.

Amazon is not run by arrogant morons. You don't invest in Boeings with hubris.
You invest after having crunched more numbers and built more models than we
can realistically imagine.

~~~
codeonfire
Yeah, well maybe there is a lot of slack that could be taken up in those other
industries. Air transportation does not seem like one that needs disrupted or
should be disrupted. The fact that it works at all is amazing.

------
brightball
At what point does Amazon get into monopoly territory?

~~~
dmlittle
Not a monopoly but Amazon Basics products are copies of Amazon's best selling
products at a much cheaper price. This makes third-party vendor competition
pretty harsh. I can buy a Rain Design mStand Laptop Stand for $40 or buy the
Amazon clone for $20.

~~~
cdr
The Amazon Basics items I've seen could be described as "the minimum
acceptable". It's better than the typical Chinese junk, but anyone upmarket
shouldn't have to worry.

~~~
sotojuan
Then it was a genius idea. There's tons of awful, broken stuff for really
cheap on Amazon. With basics you get something you can at least know it works
and if not can complain to someone.

------
nickhalfasleep
Just imagine if packages could drop out the back and be guided by image
recognition and GPS to land on your porch.

------
dlmsites
This is great for consumers, but has anyone considered the environmental cost
of this?

~~~
freehunter
Have _you_ considered the environmental cost? If so, what was your result? How
much more/less damaging to the environment do you believe this will be?

Sorry if I'm coming off a little harsh, but this is a pretty low-effort
comment that doesn't actually add anything to the conversation.

~~~
placeybordeaux
Yeah it sounded a bit like "Won't anyone think of the children?"

------
JanSt
Amazon really is like the amazon river, branching out in so many areas that
are still related with it, all the while improving the found methods and
technology.

------
astrodust
Maybe they could buy old B-52 bombers and convert them to drop laser-guided
guided packages to their destinations.

------
elchief
Wow, what an abysmal failure by UPS (or whoever does most of Amazon's
shipping). You had one job.

CEO should step down.

He should have kept Bezos happy. Lowered rates. Lowered own costs.

~~~
elchief
Just fucking delete me

~~~
astrodust
They could do what, exactly? Slash their prices and run themselves into the
ground? Who knows how much money Amazon is sinking into this venture and
running it at a loss, hoping to make it up in other areas.

There's no way "free shipping" isn't costing them a mountain of money, but
they can just blend it into other operational costs. Logistics companies make
_all_ their money on this stuff, they can't afford to subsidize.

For FedEx to do Amazon a "favor" by matching prices is suicidal. It sucks they
lost the business but there's nothing they can do.

