Amazon plans to build a $1.5 billion air cargo hub in Kentucky (updated)

The company could eventually deliver packages and become a direct competitor to UPS and FedEx.

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Mariella Moon
February 1st, 2017
In this article: aircargohub, amazon, business, culture
REUTERS/Noah Berger
REUTERS/Noah Berger

We may be decades away from the flying warehouses Amazon wants to build, but the e-commerce giant is growing its shipping and distribution network in different ways. The company has just announced that it plans to build its first air cargo hub at Northern Kentucky Airport to house its current and future fleet of planes. It's expected to cost Amazon over $1.5 billion in investment and might eventually have buildings and material-handling equipment. According to The Wall Street Journal, this move signifies that Amazon is "ramping up its expansion into transporting, sorting and delivering its own packages."

When the 2-million-square-foot hub opens, it will certainly reduce the e-retailer's dependence on UPS and FedEx in the area. It will initially employ 2,000 people, but it could end up having more personnel. WSJ says Amazon's end goal is to deliver packages for itself and other retailers -- to ultimately become a legit courier and direct competitor to bigger companies like UPS. It helps that the cargo hub's location is apparently within a couple of days' drive from a densely populated area.

While Amazon doesn't have a timeline for the air cargo hub yet, it has already begun working on its shipping freight endeavor. A WSJ report from a few days ago revealed that the company has been coordinating shipments of containers from China since October as a freight forwarder.

Update (02/01/17): Northern Kentucky International Airport chief Candace McGraw has revealed in an interview that Amazon is planning to schedule over 200 flight departures and landings per day at its new hub. That's enough to convince analysts that the e-commerce website truly wants to become a full-fledged UPS and FedEx rival.

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