Amazon "sneezes" a day of delivery and a cold environment conducive to retail and logistics – FreightWaves

Achieving such ambitious and consistent delivery targets could mean doubling the number of air cargo deliveries by Amazon's two airline partners, Atlas Air Worldwide Holdings (NASDAQ: AAWW) and the Air Transport Services Group (NASDAQ: ATSG), to reach 87 devices, according to the same source. Kevin Sterling, transportation analyst for Seaport Global Securities. This could lead to a major expansion of its terrestrial network, both in terms of physical structures and automation. No investment will be cheap.

Amazon will eventually need 350 to 400 US delivery stations to support day-long shipments to markets with more than 100,000 inhabitants, according to Marc Wulfraat, whose board, MWPVL International, follows the activities of the physical network Amazon. According to MWPVL data, Amazon currently operates 115 delivery stations in the United States, and another 10 are in preparation. Currently, Amazon is focused on US markets with more than 250,000 people, but it will grow stronger in markets with populations of 100,000 or more, said Wulfraat.

Amazon faces another potential hurdle in that it will have fewer opportunities to create high road density because it will have a shorter time to exploit the volumes needed for route optimization and creation. of efficiencies, said Wulfraat.

For manufacturers and competing retailers, Amazon's projects are a nightmare of epic proportions. If the 8% business figure released by UPS Inc. during its first quarter is an index, companies are forced to switch to higher-priced air deliveries to meet the high expectations of their customers, set mainly by Amazon. Pushing – or reducing – the two-day delivery envelope to one is an exponential challenge for companies already constrained by higher shipping costs, faster deliveries on one side and a consumer base obsessed with delivery free of the other.

For UPS, Amazon's initiative could be a litmus test for its multi-year "transformation" initiative, whose centerpiece is several highly automated concentrators designed to increase throughput by up to 35 percent over to less automated concentrators. . UPS distributes 20 million parcels and letters a day on a global network. A 35% increase in throughput would therefore be considerable.