A $1.5 billion air hub will house Amazon cargo planes
February 1, 2017 01:49 PM
(Bloomberg)—Amazon.com Inc. is building a new air hub near Cincinnati to support a growing fleet of planes that can move inventory around the U.S. so online shoppers get their orders quickly.
Amazon, No. 1 in the Internet Retailer 2016 Top 500 Guide, will invest $1.49 billion to build the facility on 900 acres at Cincinnati/Northern Kentucky International Airport, said Mindy Kershner, an airport spokeswoman. The airport is located in Hebron, Ky., and is southwest of Cincinnati.
The e-commerce giant has 11 warehouses in Kentucky where inventory is stored, packed and shipped to customers ordering goods over the internet. The air hub will support the 16 planes transporting Amazon inventory around the country. Amazon last year signed agreements with two carriers to lease as many as 40 cargo planes to support its new Prime Air operation.
Cargo planes are one of the latest tools the Seattle retailer is using to control and improve delivery. Other efforts include a mobile app for delivery drivers and increased trucking capacity. The company already has a worldwide network of about 149 fulfillment centers and 20 sorting centers that handle online orders and uses 45,000 robots.
Amazon will employ 2,000 workers at the new facility when it opens at Cincinnati/Northern Kentucky International Airport. CEO Jeff Bezos earlier this month pledged to hire 100,000 people in the U.S. over the next 18 months.
Amazon's transportation and logistics partners have faced challenges in managing Amazon's growth, and the hub likely foreshadows significant further investment in air-cargo logistics infrastructure, R.W. Baird & Co. senior analyst Colin Sebastian writes in an analyst's note. "Along with Amazon's ocean freight-forwarding ambitions, we believe Amazon's air cargo/logistics investments could evolve into third-party services over time," he writes.