Amazon leases 20 Boeing 767 aircraft for air deliveries across US

Since the company spent $11.5 billion on shipping last year, this move will likely reduce freight and other charges

Amazon said on Wednesday it had signed a deal to lease 20 Boeing 767 aircraft to handle more of its own deliveries in the United States to reduce cost and extend its supply chain. 

The electronic commerce and cloud computing company spent $11.5 billion on shipping last year and relies heavily on carriers like United Parcel Service Inc and FedEx Corp to deliver most of its packages, Reuters reported.

"This is an incremental negative for FDX and UPS as it will likely remove some higher yielding express freight and parcel volume from each of the respective networks," RBC Capital Markets analyst John Barnes said.

Meanwhile, American global courier delivery services company FedEx said the announcement was not a surprise and called Amazon a valuable customer.

 

"We work closely with Amazon and have been aware for some time about their need for supplemental air capacity related to inventory management," said Patrick Fitzgerald, senior vice president of integrated marketing and communications at FedEx.

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Headquartered in Seattle, Washington, Amazon is the largest Internet-based retailer in the United States. The company started as an online bookstore, later diversifying to sell DVDs, Blu-rays, CDs.

The company also produces consumer electronics-notably, Amazon Kindle e-book readers, Fire tablets, Fire TV and Fire Phone-and is the world's largest provider of cloud infrastructure services.