Amazon (AMZN - Get Report) is unmatched when it comes to delivery and logistics, so it may come as no surprise that the company is reportedly looking into leasing its own jet planes to deliver packages more quickly and reliably.
The e-commerce giant is having discussions with several air cargo companies to lease 20 Boeing 767 jets, according to The Seattle Times, including Air Transport Services Group, Atlas Air and Kalitta Air. Leasing the 20 planes would potentially cost at least $75 million per year, according to The Seattle Times' report.
The article follows a similar report last month from Motherboard, which suggested that Amazon was testing its own air cargo system in Wilmington, Ohio.
All of this adds to a growing belief that Amazon wants to eventually cut out all third-party delivery services such as UPS (UPS - Get Report) and FedEx (FDX - Get Report) so that it can have greater control over the logistics process.
"We believe this is yet another indication of Amazon's desire to internalize many services once reserved for traditional [transport and logistics] couriers/freight forwarders (i.e., UPS/FedEx), in particular, routes where Amazon's fulfillment network density/scale make such undertakings profitable, such as East Coast-West Coast air routes (for airfreight loads) and densely populated metropolitan areas (for last-mile parcel delivery)," Baird analyst Colin Sebastian wrote in a note Friday morning.
Ever since the holiday debacle two years ago when packages arrived late for Christmas due to difficulties with UPS, Amazon has been steadily ramping up its own delivery efforts. It continues to open up new fulfillment and sortation centers, is experimenting with delivery by drones and even owns its own trucks now for the last mile delivery.
"Importantly, with shipping and delivery a key component of customer service largely out of Amazon's control, we understand the company's desire to in-source more of the transportation network, in particular as other service providers struggle again this holiday with significant e-commerce deliveries," wrote Sebastian. "Amazon may be the only company with the fulfillment/distribution sophistication and scale to compete effectively with incumbent service providers (UPS, FedEx)."