Amazon takes flight with Boeing cargo fleet

March 11, 2016

Amazon has entered into a deal to lease 20 Boeing cargo planes as the retailer continues to find creative solutions to lower delivery costs.

The deal extends for five to seven years, and each jet can transport roughly 88 tons of freight.

Amazon spent $11.5 billion on shipping in 2015, and that number continues to rise at double-digit rates. Shipping costs rose 32 percent from 2014 and 74 percent from 2013, according to CNN Money.

Skyrocketing shipping costs are compromising the retailer’s growing sales and profits, spooking Wall Street and forcing Amazon to entertain solutions.

Amazon raised the minimum order amount for non-Prime members to receive free shipping to $49, excluding eligible books. It has also added a new component to Prime, forcing members to pay additional fees on smaller items with the creation of Prime Pantry. Shoppers who otherwise would order just a few household goods or consumable items, now pay $5 and can add as many products to the pantry box as will fit to qualify for Prime shipping.

And then there’s the much-publicized tests of drone delivery; a crowd-sourced delivery service called Flex; and a new fleet of Amazon-branded trucks that will cart products between fulfillment centers and sorting locations.
For more:
-See this CNN Money article

Thursday, March 10, 2016 | By Laura Heller