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Instant Analysis: Amazon.com Reportedly on Board to Lease 20 767's

What happened?

Amazon.com is reportedly in negotiations with airplane leasing companies to lease 20 Boeing 767s in an attempt to circumvent third-party package delivery companies and prevent a repeat of the Christmas 2013 debacle that resulted in orders not arriving in time for the holiday.

Ever since and suffered a logistics breakdown two years ago after they were inundated with orders they couldn't handle, Amazon has increasingly sought to assume greater control over shipments. From drones to crowdsourced delivery options, the e-commerce leader has tried to ensure the so-called last mile leg of delivery is more firmly in its grasp.

Does it matter?

Ever since UPS and FedEx suffered a logistics breakdown two years ago after they were inundated with orders they couldn't handle, Amazon has increasingly sought to assume greater control over shipments. From drones to crowdsourced delivery options, the e-commerce leader has tried to ensure the so-called last mile leg of delivery is more firmly in its grasp.

Recently it was speculated Amazon might be preparing to go toe-to-toe with UPS and FedEx when reports surfaced of a mystery company partnering with Air Transport Services Group to test a new airborne delivery network, contracting four 767s to operate out of an Ohio airport hub. While the customer is unknown, it was widely speculated it was Amazon.

Now The Seattle Times is reporting that sources claim Amazon has been in touch with Air Transport Services, Atlas Air , and Kalitta Air to lease 20 cargo planes, though the latter has denied it's been contacted.

While Amazon.com relies most heavily upon the U.S. Postal Service for its package deliveries, or 35% of the total, UPS is a close second at 30%, with another 17% falling to FedEx. Even though the retailer has spent more than $3 billion in shipping costs, its business only represents a small portion of the package delivery giants' total.

As more rumors mount, it appears Amazon.com intends to get into the logistics network. That would be a significant development for the retailer, but it may not hurt UPS or FedEx all that much.

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The article Instant Analysis: Amazon.com Reportedly on Board to Lease 20 767's originally appeared on Fool.com.

Rich Duprey has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Amazon.com. The Motley Fool recommends FedEx and United Parcel Service. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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