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FAA seeks fines against Amazon for air cargo hazards

June 13, 2016 12:10 PM
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(Bloomberg)—U.S. aviation regulators are seeking a $350,000 fine against Amazon.com Inc. for allegedly sending hazardous shipments as air cargo.

E-commerce giant Amazon, which has made two deals this year in an attempt to create its own air-shipping network, was charged Monday with improperly sending a caustic chemical that leaked and came in contact with nine workers at a United Parcel Service Inc. facility, the Federal Aviation Administration said in a press release. Amazon is No. 1 in the Internet Retailer 2016 Top 500 Guide.

“Amazon has a history of violating the hazardous materials regulations,” the FAA said in the release. “From February 2013 to September 2015 alone, Amazon was found to have violated the hazardous materials regulations 24 other times.”

The shipment of corrosive drain cleaner wasn’t properly packaged, declared and labeled, the FAA said in the release. Amazon also failed to include emergency response information on the package and didn’t train employees on handling hazardous materials.

Assembling fleet

Companies hit by FAA fines can negotiate with the agency and penalties are sometimes reduced. An Amazon spokesman didn’t immediately respond to an emailed request for comment.

The FAA’s action comes a month after Amazon agreed to take as much as a 30% stake in Atlas Air Worldwide Holdings Inc. As part of the deal, Atlas will acquire and operate 20 Boeing Co. 767-300 freighters for Amazon, according to a May 5 statement.

In March, Amazon announced it would work with Air Transport Services Group Inc. to operate another 20 Boeing 767 freighters.

The retailer is moving swiftly to build up its delivery system in an attempt to reduce its dependence on UPS and FedEx Corp. as it expands its Prime membership service that delivers some orders in as little as one day.

Global network

Chief financial officer Brian Olsavsky downplayed Amazon’s ambitions in an earnings call in January, saying the company wants to supplement the two shippers, not replace them. Documents reviewed by Bloomberg News reveal the company may be planning a bolder strategy to create a global delivery network to control the flow of goods from factories to customers’ doorsteps.

At the same time, Amazon is developing drones capable of short-distance, rapid deliveries of small items. The company has received FAA permission to test unmanned aircraft and is also doing development in other nations.

The FAA didn’t detail Amazon’s previous violations in Monday’s press release. According to previous press releases on its website, the FAA has opened enforcement actions against Amazon for shipping flammable paint and other items without proper packaging and marking in at least four previous cases since 2014. The agency sought a total of $314,000 in fines in those cases.

 

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