Amazon Air’s expansion into third-party air cargo services is showing “considerable upside potential,” according to a new analysis by Joseph Schwieterman of the Chaddick Institute. This strategic move is expected to address operational imbalances, increase service regularity, and benefit from recent infrastructure growth at key hubs, positioning Amazon Air for a strong future in the competitive air cargo market.
Schwieterman’s report highlights the challenges Amazon faces with directional imbalances in cargo at several of its major hubs. For instance, Amazon’s Cincinnati (CVG) hub has a directional imbalance of 17.7%, with Fort Worth at 25.7% and San Bernardino (SBD) at 32.2%. These imbalances are greater than those of major integrators like UPS and FedEx, who benefit from more widespread “anywhere to anywhere” business models.
Amazon’s business model, focused on business-to-consumer and business-to-business shipping, has resulted in a high concentration of cargo originating from a limited number of fulfillment centers and warehouses, particularly around CVG and SBD. Schwieterman suggests that carrying third-party cargo could help mitigate these imbalances by balancing out inbound and outbound shipments.
A second key factor for Amazon Air’s potential success is its improved flight schedule regularity. Over the past few years, Amazon Air has moved away from the erratic, “hopscotch-style” routes common during the pandemic. Now, some planes, like the newly acquired A330s, operate the same routes consistently. This regularity makes it easier for Amazon to sell excess cargo space well in advance, reducing the risk of conflicts with its internal shipments.
Schwieterman also points to the airline’s expanding hub network as another advantage. Since the start of 2024, Amazon has ramped up flight frequencies from its CVG hub, and the number of flights at its five main hubs now accounts for 80.5% of its total flights, up from 65.5% in early 2021. This concentration of flights makes Amazon Air more attractive to third-party customers with large-scale shipping needs, despite the complexities of managing directional imbalances.
At the recent TIACA Air Cargo Forum, Tom Bradley, Amazon Air Cargo’s global director and general manager, discussed how the airline would balance its core Amazon business with its new third-party cargo service. Bradley explained that technology and its expansive network would allow Amazon to manage both operations without conflict. He emphasized the flexibility of the airline’s dense hub-and-spoke and point-to-point network, paired with a robust ground transportation system that includes road and rail. With real-time dynamic routing, Amazon can make adjustments on the fly, ensuring that both Amazon packages and air cargo shipments can coexist smoothly.
The third-party service, which will operate on over 100 aircraft across more than 250 daily flights, will offer ad hoc, charter, or block space services. Amazon Air will also handle a diverse range of cargo, including general goods, pharmaceuticals, perishables, dangerous goods, and parcels, using its fleet of Boeing 737, Boeing 767, and Airbus A330 aircraft.
As Amazon Air’s infrastructure continues to grow and its third-party services expand, the airline is poised to capitalize on its increasing capacity and network efficiency, making it a formidable player in the air cargo industry.
