retail news in context, analysis with attitude

The Seattle Times this morning reports that Amazon "is negotiating to lease 20 Boeing 767 jets for its own air delivery service ... The online retail giant is building out its own cargo operations to avoid delays from carriers such as United Parcel Service, which have struggled to keep up with the rapid growth of e-commerce."

Leasing 20 jets, the story says, "would be a significant expansion of an Amazon trial operation out of Wilmington, Ohio, according to sources. A cargo industry source said Amazon expects to make a decision to go beyond the trial run and pull the trigger on a larger air cargo operation by the end of January."

The story goes on to point out that this wouldn’t be cheap: "Leasing newly built Boeing 767F jets runs to $600,000 to $650,000 a month, according to cargo industry experts. With so few of those jets available, Amazon would likely turn to lease partners to pick up used converted freighter jets. Those cost about $300,000 to $325,000 per month to lease."
KC's View:
Based on recent reports and personal experiences with some of the delivery companies, I can certainly understand why Amazon is trying to bring as many of these services in-house as possible. I'd love to see the financial studies that indicated this was a good move ... I'm sure I wouldn't understand them, but I'd still love to see them.