
Amazon Plans First Air Cargo Hub - prostoalex
https://www.wsj.com/articles/amazon-com-plans-first-air-cargo-hub-1485901557
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leecarraher
Good choice on CVG. I live in cincinnati and ever since they started signing
exclusivity deals with delta, service options have declined, forcing other
airlines out, leaving a biggly(largely) vacant airfield.

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pizzetta
Wasn't Cincinnati the alternate choice for hub by Fred Smith and colleagues at
the founding of FedEx?

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awalton
If my memory is good on the subject, I think it was because CVG was a much
bigger Delta hub at the time that it was hard for them to turn it into a
shipping hub and not disrupt passenger traffic.

Now that Delta has vastly scaled back operations at CVG... time's right.

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pizzetta
I found a response from essentially the horse's mouth #1:

"So, there were about three candidate locations, Memphis and, as I recall,
Cincinnati and Kansas City. The Memphis airport had some old WWII hangers next
to the runway that FedEx could use for the sort center, aircraft maintenance,
and HQ office space. Deal done -- it was Memphis. That's how the decision was
really made."

#1
[https://news.ycombinator.com/item?id=9282104](https://news.ycombinator.com/item?id=9282104)

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dx034
Could mean that they want to coorporate with DHL to some degree? DHL doesn't
have a big network within the US, but they do have a lot of capacity Asia->US.
So perhaps they'll use DHL to get goods to the US and use their cargo
planes/fleets from there. That way they have to pay less to DHL and don't have
to build up capacity to ship Asia->US as well.

Guess makes sense for both parties, DHL doesn't lose out (they didn't deliver
for Amazon anyway) and Amazon can focus replacing what they pay most for,
getting goods from import to the customer.

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pragone
OT: For what it's worth, the "web" link to do a google search of the article
no longer brings up search results that show the whole article.

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ohitsdom
It did for me.

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maxerickson
If I click over from the search with uBlock enabled (in Firefox), I can't read
the article.

If I then turn uBlock off, go back and click over again, I can read the
article.

This isn't very surprising when people are giving conflicting reports about
whether they can view some link. Hopefully everyone on the site that runs an
adblocker sees my comment and stops whining about WSJ links (hah!).

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wyldfire
I like Amazon. But, wow, sure does seem like some serious vertical
integration.

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nunez
This was inevitable. Shipping stuff with a third party is incredibly
expensive. You're essentially paying for their logistics and channels. Amazon
has more than enough money and data to build this themselves, and doing so
will save them a significant amount over time

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maxerickson
UPS and FedEx don't really seem to be printing money. I would think that
Amazon tends to be one of their worst customers (margin wise).

Obviously Amazon still benefits if they can capture some of that margin (and
probably from being able to specialize to themselves and find efficiencies
there), but is it a huge opportunity or is it just a worthwhile place to
optimize their business?

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digler999
Anecdotal , but I heard from UPS employees that they essentially break even on
their ground network, and essentially all their profit comes from airmail. FDX
might do slightly better on their ground, given they pay their drivers < 1/2
of what UPS pays.

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malandrew
Interestingly, if Amazon scales back on UPS and FedEx as they ramp up their
own logistics, this would leave both companies with a lot of excess capacity
and infrastructure to maintain unless there is equivalent growth from the rest
of the market. Given how much Amazon ships, that a big potential problem. It
also gives Amazon even more leverage with both shipping companies when it does
need to use them.

I'm curious if this eventually could create market problems like we are seeing
with excess shipping capacity. The World Container Index hit a 5 year low this
past year due to excess capacity.

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digler999
I'm thinking network capacity is easy to sell off / write-off in domestic
shipping, isn't it ? Trucks and trailers are "consumables" (not sure what the
proper econ term is), UPS could just stop buying new trucks for a while (not
the case with cargo jets though, those will burn a hole in anyone's pocket).

I think where it counts is the "last mile", similar to the cost of telecom.
But I dont see that many package car drivers being laid off, since the demand
is "inelastic". The driver still needs to cruise the neighborhood whether 1
guy or 100 guys are getting packages. If UPS's volume gets cut by 20%, there's
no way they're going to need to cut 20% of their drivers.

What I predict amazon will do is just have delivery stations. I would gladly
drive a mile or two to pick up my stuff from an automated locker, versus
contend with some of the tricks that I hear about so much with at-home
delivery (that I'm thankful has never happened to me).

If you eliminated the "last mile" package cars, all you'd need is hubs (which
UPS is well on their way to fully automating for pkg sorting), long-haul
drivers/pilots, and a few delivery drivers to load up the "automated lockers"
in each neighborhood.

Re: world container index, I'm assuming that includes marine shipping, which
should be independent of amazons network?

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flavor8
Well as long as they ditch USPS I'll be happy. I really want to support the
idea of a federal postal service, but it consistently sucks in comparison to
UPS.

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jayrox
USPS could do a few things to improve and they really aren't that big. For the
following examples consider this: I live on a "no outlet" road. Meaning 100%
of traffic is for the 20 houses on the street and not through traffic. And of
the local traffic it is extremely minimal, we have more kids playing on the
street than we have cars.

1) Stop being lazy. For example, I ordered something from Amazon and even
though I have Prime, I paid for next day delivery. It was something I really
needed. I rushed home that day excited to finish a project. Looking out the
window I watched the USPS guy drive right past my house. A short while later I
got a notice from Amazon that my package wasn't delivered due to an
obstruction blocking my mailbox. I go out to the mailbox and look around
trying to figure out what the obstruction was. The only thing I could figure
out that would be possibly considered an obstruction was the trash cans I had
just taken out that were about 5 feet to the left of the mailbox.

2) Consider somethings could possibly be fragile and take that into account
when handling. For example, earlier this week I had 2 "large" flat envelopes
delivered that were clearly way too large for my mailbox. Instead of
considering that the contents may be fragile the USPS guy just jammed the
envelopes into the mailbox the best he could making them into a crumpled mess.

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enraged_camel
It's not about laziness. Fedex and UP ruthlessly measures the efficiency of
their drivers by timing their every single activity. This information is
displayed in real-time to managers back at the warehouse, who can see, for
instance, if a particular delivery is taking longer than average.

This is why many drivers game the system by skipping deliveries that they
think will take too long, or (for packages that require signature) wait for
only ~5 seconds after knocking on the door before deciding that you must not
be home.

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joekrill
Wouldn't that then imply that you would get worse service from Fedex and UPS,
where the drivers have more to gain by cutting corners? But the reality is
really the exact opposite.

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phil21
It's highly dependent on where you live and the individual driver assigned to
your route.

I used to absolutely wonder in confusion why people complained about the USPS
- where I grew up it was always cheaper and generally more reliable than UPS
or Fedex. Plus if you ever had to go into the Post Office the people were
downright pleasant and competent.

Then I moved to Chicago, and I instantly realized the reputation was deserved.
It was essentially two entirely different postal systems, you would simply not
recognize them as the same "company".

UPS and Fedex I've both had utterly fail for me living in different locations,
just lazy worthless drivers happened to be assigned to me.

I will say all the complaining about "leaving packages to get stolen" needs to
stop - if you're concerned get a box to put them in. Otherwise it's not
reasonable to have these guys wait on you to come to to door. Sure it's only
30 seconds, but that's 30 seconds multiplied by 200 each day. Sure there will
be some shrink just like a retail store, but it's still overall much more
efficient.

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kalleboo
> Otherwise it's not reasonable to have these guys wait on you to come to to
> door. Sure it's only 30 seconds, but that's 30 seconds multiplied by 200
> each day

The only place I've had packages left outside is in the US. In every other
country, every package that doesn't fit in the mailbox requires you to come to
the door (or in many cases, it will require you to pick it up at a local
postal pickup point, usually a nearby supermarket/convenience store/gas
station)

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JHof
Will Amazon eventually buy one of these carriers? Or maybe start their own
thing?

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ohitsdom
From the article, it seems clear they want to start their own thing. "Amazon’s
goal is to eventually haul and deliver packages for itself as well as other
retailers and consumers—making it a direct competitor with UPS and FedEx,
according to people familiar with the matter. "

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bluedino
The question is will they pay their drivers and sorting facility workers as
much as UPS and FedEx. A UPS driver makes $25-$30 which isn't a bad gig, and
FedEx pays around the same. Even a part time sorting job is a pretty good job
for a college student.

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tokenizerrr
Seems like an interesting story, too bad I cannot read it even after trying
the google search workaround.

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lorenzhs
[http://archive.is/miR4p](http://archive.is/miR4p) should work

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mnx
You can google the title to bypass the paywall.

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pragone
If you know how in a way that actually works, I'm all ears. WSJ seems to
rarely, if ever, work for me googling the titles these days.

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maxerickson
Try turning off your adblocker for WSJ.

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pragone
Tried accessing it via incognito - that didn't work either

