Amazon in talks to lease Boeing jets to launch its own air-cargo business | Hacker News Reader

Amazon in talks to lease Boeing jets to launch its own air-cargo business

seattletimes.com

20 pointsourmandave21 comments

Does USPS still operate at a huge loss?

Its a strange subsidy for the US Govt to operate USPS while major portions of USPS work are paid for or performed by private companies. For examples, Amazon pays USPS to deliver parcels on Sundays. Does USPS make money providing that service? USPS pays FedEx handle overnight airfreight in a massive contract [1]. I'm sure there's others, those are just two from recent memory.

Now Amazon is looking to handle its own inventory load balancing act while handing off to USPS for the last mile, presumably the costliest portion of delivery.

I'm not sure I take issue with it, I just find it interesting.

[1] http://www.bloomberg.com/news/articles/2013-04-23/fedex-to-f...

To be fair, you have to include how organizations have to amortize their medical/retirement obligations in cooking the numbers. The USPS has much stricter such constraints than any other element of the Federal government.

>Now Amazon is looking to handle its own inventory load balancing act while handing off to USPS for the last mile, presumably the costliest portion of delivery.

last mile will be handled by drones - flying, wheeling and crawling... Imagine how a drone lands at cul-de-sac and releases a bunch of Roombas (or mini-Imperial walkers) carrying the packages to the door steps...

USPS loses money because key republican congressman require that they do things like over fund pensions, while maintaining grossly unprofitable services like shipping parcels to Alaska at ground rates. Their universal service mandate also requires that they do last mile delivery to every address, so UPS and Fedex dump that work to them for pennies on the dollar.

I love the USPS, but it's not the pensions: http://taxfoundation.org/article/troubles-postal-service

It's generally considered bad practice to link a conservative think-tank when trying to explain why someone who has been hamstrung by conservatives isn't making money.

In the first two quarters of 2015 they lost $2.8 billion. In the first two quarters of 2015, they had to fund $13 billion in pensions. Pensions are 100% the issue.

Tip of my hat to Amazon. It's time someone with balls and money stand up to UPS and FedEX. I've seen first hand what these folks do to small and midsize business. $7-$12 address correction fees (these fkrs force you to use their address systems - so now a correct address in USPS can show up differently in FedEx and UPS), fuel surcharges even when fuel is dirt cheap, ridiculous and cumbersome zone charts which 90% of their staff have no clue how to explain. I could go on.

I can't wait until Amazon decides to start offering the service to the public.

I'm interested to see if Amazon will go into the carrier business, and force the others like UPS, DHL, etc to up their game and provide a good service i.e. packages delivered looking like they haven't been kicked about like a football.

However as far as I'm aware, this business is also very low margin, so a lot of room for them to lose money here too.

I don't think Amazon will get into the carrier business to do anymore ship what they sell.

This is for bottleneck reduction and benchmarking.

As SixSigma said, it makes more sense to use it as a benchmarking tool than trying to compete in a low margin market.

Amazon has crazy volumes that give them options to innovate beyond what UPS/FedEx sorting centers can do.

They can skip the whole hub step and do what Southwest did for passenger travel. Because they don't need to build a nationwide network, they can cherry pick the markets that make sense to them.

It's great for Amazon, but awful for everyone else. FedEx will lose, and UPS will take a body blow, but have more clout and market power.

How do you figure e.g. UPS doesn't have crazy volumes? They're delivering everything Amazon would already

They do, but UPS still has to sort it, right?

Amazon can sort at the origin -- make products roll out of the distribution centers in whatever order needed to fill the plane, skipping the time & cost.

Couldn't they do this today? Require that Amazon get it to them in pallets labelled by zip code

Zip code stuff has been around for years... I'm talking about optimizing the packing to ensure that the trucks are packed optimally. I've seen some references in articles that either said or implied that the level of optimization available is linked to how much data UPS is willing to share with Amazon about it's operations.

Given that Amazon uses pretty brutal public critique of UPS as a contract negotiation / customer sat tactic, and is obviously working on ways around them, I think the UPS/Amazon relationship has leaned more towards "frenemy" (vs trusted partner) for a few years now.

And in +10 years, activist investors come in and lament how much more valuable the shipping business and the e-commerce business really are when separated, as the legacy network doesn't necessarily fit the needs of the newer one :)

This happens a lot with commodity shipping at least.

It can be a very early step towards "self-flying" delivery network between major US cities.

I wouldn't be surprised if in 15-20 years Amazon / Google / Uber / Elon Musk are operating a national fleet of electric self-flying cargo airplanes.

Is that practical? Seems to me like the weight of the batteries required for long-distance flight would make this rather impractical.

I don't think that he/she was proposing that the planes be battery-powered. SpaceX certainly doesn't use batteries for fuel.

Yeah, if planes aren't going to use jet fuel I wonder if hydrogen fuel cells would be more suitable than electrical batteries, and manufacture the hydrogen on the ground using electricity.[1]

https://en.wikipedia.org/wiki/Hydrogen-powered_aircraft

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