Amazon.com, Inc. has been conducting secret trial flights that have carried thousands of packages to and from its fulfillment centers in the United Kingdom. Evening Standard reports that the tech-giant has chartered a Boeing 737 aircraft, which has been flying on routes between Poland, Germany, and England since mid-November.
The online-retail giant has reportedly chartered the aircraft from DB Schenker, a German logistics company. Five weekly flights have been determined so far, on which the planes travel first from Katowice, Poland to Kassel, Germany. Katowice and Kassel are both significant stops, as the airports in these towns are within close proximity of the e-commerce giant’s huge warehouses in the two countries, respectively.
The flight then continues from Germany to England, where the plane finally lands at one of the airports in Luton, Doncaster or East Midlands. The packages are dispatched from these airports to Amazon’s various fulfillment centers, including its biggest one at Dunfermline and another in Hemel Hempstead. The company is also rumored to extend the trials by chartering more planes and include its centers in Italy and Spain in this network.
The move highlights Amazon’s urgency to limit reliance on traditional courier firms. The company has already built its own van delivery fleet in the UK this year, after one of its couriers, CityLink, went bankrupt. On a global-scale, the company has locked horns with its chief carrier UPS. Amazon provides business worth around $1 billion to UPS, but its dissatisfaction has risen due to the increasing shipment charges. Shipping cost has increased 10.4% in a year, compared to revenues growth of 11.7% in the same period.
This means generating higher revenues did not have the expected positive impact on earnings, if supply chain costs had been further streamlined. Amazon was further unhappy with UPS services, when during last two Christmas periods the courier services was unable to deliver consumer packages on schedule, due to delivery overload. Consequentially, the e-commerce giant has sought to build its own distribution network to restrict costs, and have more control over its distribution network.
Even within the US, recent reports suggest Amazon is looking to lease 20 Boeing 767 freight aircrafts. While these are positive cost control strategies for the online-retail firm, its air cargo expansion spells trouble for traditional freight carriers such as UPS, FedEx, and DHL. These couriers will likely lose a great chunk of business when Amazon starts carrying its own inter and intra-continental freight.
An Amazon spokesman was quite tight-lipped when the Evening Standard asked for a comment over the European flights, and did not reveal information beyond the fact that the retail-firm employs various distribution and fulfillment modes, including air transport. No other official statement was made by the company.