Dive Brief:
- A variety of sources have confirmed that Amazon will be sharing a sorting hub with DHL at the Cincinnati/Northern Kentucky International Airport (CVG), The Lane Report disclosed Monday.
- Because the German logistics provider primarily uses its space at night, Amazon will utilize the 180,000 square foot sorting facility during the day.
- The plan reveals Amazon's eagerness to begin operations at the site, while its own 3 million square foot space, built on 400 acres of the 900 leased from the airport, is developed. Amazon designated CVG as the future hub for its 40 air cargo planes, to service Prime membership.
Dive Insight:
Amazon is consistently venturing further into launching its own logistics endeavors, yet its reliance on traditional logistics experts remains.
As recently as December, UPS CEO David Abney expressed a high comfort level with the company's relationship with Amazon. While it's of course unlikely that any discord would be aired publicly, the ease with which the pairs' relationship was described implied a distinct sense of security.
FedEx too seems to be unthreatened by Amazon's excursions into logistics. That's likely because of its freedom from customer retention, a problem Amazon faces in becoming a delivery provider. Both FedEx and UPS can price out of costly and inconvenient deliveries, while Amazon, which likely sold the item in the first place, must deliver, regardless of loss.
Ultimately, it remains to be seen what kind of relationship the ecommerce giant retains with the three long-established logistics icons of DHL, FedEx, and UPS once its CVG hub is up and running. But until it truly enters the market at a similar level of engagement, we're unlikely to find out.