Amazon to move Prime Air cargo hub to Cincinnati

02 February, 2017, 00:45 | Author: Kristopher Anderson

Amazon announced Tuesday it plans to build a centralized air hub in Kentucky to support its Prime Air cargo planes, Supply Chain 24/7 reports.

CVG officials have pegged the investment from Amazon at around $1.5 billion.

In a strategic move to bolster its logistics network, Amazon will build an air cargo hub in Kentucky.

Since mid-2015, Amazon had been testing an express network with dedicated freighter aircraft leased from Wilmington-based Air Transport Services Group (ATSG) and operated by ABX Air and Air Transport International. Amazon says it employs 6,000 people in OH, the state just across the border from the hub.

According to the company's press release, they began leasing 40 planes for their Amazon Prime shipping service with 16 now in operation.

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Amazon began inquiring about two months ago, local officials said, and Kentucky Gov. Matt Bevin played a key role in the deal by sitting in meetings with Amazon officials to craft a state incentive package. Amazon leased 40 dedicated cargo planes a year ago, and 16 of them are in service today.

Investors continually debate whether Amazon (AMZN) is overvalued, with bulls saying the company can "turn on the jets" when it comes to earnings and bears arguing that the company's profits are just too small to justify its near-$400 billion market cap. Cathy Roberson (right), Founder and Head Analyst for Logistics Trends & Insights, predicts further expansion in the U.S. "Amazon's investment in an air hub is a clear indication that they plan to not only handle their own parcels but also compete head to head with FedEx, UPS, and DHL", she told FlyingTypers.

Amazon.com, Inc. has a lease agreement for 40 cargo planes. 2,000 of these jobs will be at the hub in Kentucky.

Those interested in learning more about how e-commerce from companies like Amazon will shape the future of air cargo should join us at Cargo Facts Asia in Shanghai, April 25-26. Moreover, FedEx which has more than 900 acres of land for Memphis hub also comes to the light as a competitor.

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