Heather Jarvis-Gann
April 2, 2016
Transportation Management
Dino Scott
Amazon Transport
When I first heard the rumors about Amazon getting into the transportation business, I didn’t
ask questions about why they would want to own their own supply chain. I didn’t ask about where they
would setup their hub. I also didn’t ask when they would do it. I asked if they thought they could do it
and make money at it. Apparently, they do think they can do it. That’s the whole point of a big move,
right? To make a boatload of money on a great idea! This month, the news came out that Amazon will
be partnering with Air Transport Services Group (ATSG) and they want the world to know that they are
not afraid of owning their own delivery network. ATSG has made a deal with Amazon to lease its planes
for exclusive use for the next 5-7 years. Who will this help or hurt?
Based on the 2011 annual report from UPS, Amazon holds just a little less than 10 percent of
UPS package sales (all modes). Amazon reports about 600 million packages move within the US in a
year. Amazon gives approximately 30 percent of their deliveries over to UPS. However, UPS claims that
their business will only suffer a 2 percent loss in expected sales for the year if all of Amazon’s packages
disappear overnight. Amazon, however, has a lot of explaining to do.
How will they collect packages? How will they load their planes? How will they sort the
packages? Who will hire the employees? When will this begin and how much will be removed from each
