In September of this year, U.S.-based aircraft lessor Air Transport Services Group, or ATSG, launched what it called a “trial ACMI express network” at an underused cargo airport in Ohio, leasing four 767 freighters to an unnamed client.
With the express companies FedEx, UPS and DHL all repeatedly denying that they are involved in the operation, evidence is mounting that the sortation hub is the latest step by e-commerce giant Amazon to enter the airfreight logistics business according to a report from Motherboard.
The operation is known as “Aerosmith” and as stated, Amazon is likely the mysterious client that runs it.
Wilmington Air Park is a non-passenger airport that has been air-shipping cargo for various clients for decades.
DHL ran operations there from 2003 to 2008, but after its departure, the facilities went largely unused. The airport has two large runways and eight industrial facilities for sorting and shipping.
As Motherboard notes, Amazon has recently been searching for more effective ways to get its products to consumers, from creating a drone superhighway to opening physical stores.
Well everyone probably knows that Amazon was the first company to be authorized to fly commercial drones, but what you don’t know is that they are flying two B-767’s and within the next two years are planning to be the world’s’ largest overnight parcel delivery service. Yes that includes FedEx and UPS. I know this to be a FACT not a rumor; I work for them! - Airline Pilot Forums
Having its own air cargo operation would allow Amazon to ship without the hassle of a middleman like UPS, which has previously been blamed for Amazon’s delivery delays.
Since September, ATSG has contracted four Boeing 767s that together make a total of four flights per day. Motherboard has confirmed the planes fly from Wilmington to four other airports: Allentown, PA (ABE), Ontario, CA (ONT), Tampa, FL (TPA) and Oakland, CA (OAK). Amazon has distribution centers within fewer than 60 miles of each airport.
A post on a piloting forum this past October claimed to have insider knowledge that Amazon was working on an overnight parcel delivery service.
The rumor has not yet been confirmed by Amazon.
Air Transport Services Group Ready To Take Off
There are some legitimate areas of concern in the global airfreight market.
Airfreight volumes are up for the year, but have been outpaced by capacity growth and it’s hard to find much optimism regarding the health of the U.S. or Chinese economies.
That said, Air Transport’s regional focus is an important differentiator, as it gives the company exposure to e-commerce growth, and the company’s efforts to diversify its business seem to be on a good track.
Not All Freight Is The Same
It stands to reason that freight transport demand is economically sensitive, but companies like Air Transport Group don’t have quite the same level of direct sensitivity as companies like FedEx, UPS, DHL, as their leases often have minimum operating guarantees built into the terms.
Nevertheless, the 2.4% year-to-date increase in global airfreight through September (as reported by IATA) has to be viewed in the context of the much greater 5.6% increase in capacity. Europe has been a little stronger here of late, but weaker GDP growth performance in the U.S. and Europe won’t help the airfreight industry.
Air Transport’s 767s and 757s are perfectly suited to regional work. In particular, management has noted stronger demand for regional capacity in response to increasing express demand to fulfill growing e-commerce volume (Amazon?).
Management is definitely pursuing the e-commerce idea with vigor.
The company announced earlier this year that it was going to acquire a 25% stake (the maximum allowed by law) in a Chinese joint venture to deploy all-cargo freighters for e-commerce deliveries in China.
Source: Seeking Alpha
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