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Spacepope
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Re: Amazon Fleet Growth - 2018

Mon Feb 19, 2018 7:26 pm

yochai wrote:


N387AM in TLV earlirer this afternoon


Whoa that's quite a bit more primer than usual forward of the cargo door.
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cmairplaneman
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Re: Amazon Fleet Growth - 2018

Mon Feb 19, 2018 8:36 pm

Any idea when N387AM is coming back to CVG or ILN? I am also curious as to what is going on with N7375A as it left for TLV before 387AM did.
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wjcandee
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Re: Amazon Fleet Growth - 2018

Mon Feb 19, 2018 9:46 pm

travaz wrote:
wjcandee wrote:
yochai wrote:
N387AM completed a sucessful tets flight, N7375A is still in storage, but the 2 Atlas birds N1619A and N1487A have been moved to the conversion line earlier this week andhad work started on them.


Wow! If 1619 and 1487 are starting into conversion, those are the final two Atlas/Amazon aircraft to be converted by Bedek. They are number 18 and number 19 of the Atlas 20. (The 20th one, 1489, is at TPE.)

Seems like just yesterday that 307AZ was going through conversion...

wj I thought I read that Prime Air was shooting for 40 Aircraft?


Right. Sorry if I wasn't too clear. Acey explained it well.

You are right that there are to be 40 aircraft, 20 at each of ATSG and Atlas. There were the 12 767-200s that came aboard early on that were ABX Air castoffs and 3rd party lease returns to CAM. That left 28 767-300s. So ATSG (CAM) had to convert 8 and Atlas had to convert 20. ATSG got its 8 converted and in service by like October 2017. At that point, Atlas had somewhere around 10 in service. Now they have 12. There are 7 still being converted and one that has been received by Atlas but not yet delivered to Prime Air. It is white and just flying around occasionally on Atlas stuff.

All of the remaining conversion aircraft are now actually being worked on at the conversion houses (as opposed to just being stored there or doing preliminary interior stripping and such), which is cool.
 
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yochai
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Re: Amazon Fleet Growth - 2018

Tue Feb 20, 2018 9:00 am

cmairplaneman wrote:
Any idea when N387AM is coming back to CVG or ILN? I am also curious as to what is going on with N7375A as it left for TLV before 387AM did.


387 will leave for Shannon on Friday morning, will probably nightstop for crew rest and head onwards to the US on Saturday
 
Whiplash6
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Re: Amazon Fleet Growth - 2018

Tue Feb 20, 2018 9:29 pm

Does anyone know anything about 1499a?

Or 1621a?

Or 1667a?

Or 1697a?

And many more that are brand new reserved n-numbers with Atlas Air.
 
wjcandee
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Re: Amazon Fleet Growth - 2018

Wed Feb 21, 2018 12:16 am

Whiplash6 wrote:
Does anyone know anything about 1499a?

Or 1621a?

Or 1667a?

Or 1697a?

And many more that are brand new reserved n-numbers with Atlas Air.


Optimism by Atlas? I haven't heard even a whisper that Amazon is currently planning beyond the 40 767s.

Like I said earlier, I think there's a reasonable possibility that the next tranche of aircraft is smaller than a 767. But who knows? Amazon is good at keeping cards close to the vest, and at some point somebody is going to make a decision about how and when to grow the network beyond its current confines -- although now it has to look at an exclusively point-to-point network for expansion until its organic sort is erected and made functional at CVG, which is years away, if ever. Yes, they've bought a bunch of land and are doing development planning, but somebody has to commit to a gargantuan capital investment that is an order of magnitude larger than what they have done so far if Amazon Prime Airport (tm) is gonna be a reality. And someone is going to have to really evaluate the strengths, weaknesses and limitations of the current air operation before shovels hit the ground. There are doubtless a lot of issues under the surface, some of which I can readily recognize. It will be very interesting to see what the next incremental phase of the existing network ends up looking like.

Candidly, I think Atlas is going to be too expensive to fly something like a 737, especially after the Southern pilot group's payscale bumps up to the current (or future) Atlas one. Bezos's friend at Saltchuk is presumably lobbying for NAC at every turn. (Remember, NAC was flying 737s as part of Project Alpha, which was a companion to Project Aerosmith.)
 
wjcandee
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Re: Amazon Fleet Growth - 2018

Wed Feb 21, 2018 9:56 am

Just to kick around the smaller-aircraft theory a bit...

First, I think such aircraft would likely be better in a sort environment than a point-to-point environment, simply because going into smaller cities would probably work better where traffic from multiple nodes could be combined for that trip into the smaller cities. Flip side: unless those smaller cities also include potential Amazon (or other?) origination points, then the traffic is going to be unidirectional. While there are certainly directional imbalances in the current network, I can think of only one place (maybe two) where the network operated effectively a repositioning leg. (I don't know for sure, and could be totally wrong, but I can't imagine that there was much if any at all PDX-SEA air traffic, for example). I'm sure there's a lot to think about on this issue, but that's the top-level issue that I see. Does Amazon decide only to serve cities with air service that has a DC or DCs? Is this an opening for adding additional nodes driven solely by that new service where Amazon offers to pick up what are effectively drop-shipments from certain manufacturers and deliver them (i.e originate the traffic without it passing through an Amazon DC)? I don't know.

Second, what's the optimal size of the next aircraft type? I have no knowledge whatsoever that would allow me even to speculate about this. A 757 holds less than a 767-200, but is that still too big? Is a 737 or an A320/321 better? (The A321 is actually closer to the 757, of course.)

Third, what's the optimal feedstock purchase point when evaluating longevity/reliability? The world's 757 fleet is getting pretty long in the tooth. The market for conversions at this point is pretty thin, even if the feedstock is getting pretty cheap. It's getting pretty-cheap for a reason. Add the cargo conversion cost, and it's not clear that the result is cost-effective for a network like Amazon's, given the expected reliability and longevity of the converted frame. But if it's the right size and there's nothing else, maybe it's the move unless/until the Precision Conversions/PEMCO A321 is certified and suitably-inexpensive feedstock begins to become available. We're talking at least two years for the former and longer for the latter. So that leaves the 737-800 conversions, as the Classic stuff, while still popular for conversions, is getting a bit scarce (with the more-optimal frame being the -400) in suitable frames. I think we'll see those -800s start to be converted in regular-but-small numbers in the near-ish future. Does Amazon move sooner with some Classics? Wait for -800 prices to drop enough to make it typically-viable, or get in early with newer (read: longer longevity, more-reliable) frames? Wait until the 321 conversion market heats up, if it does?

Or do they decide to go balls-to-the-wall and start laying the groundwork to pick up another 10-20 767-300s beginning in late 2018 or early 2019? The CAM conversions for non-Amazon customers, and the remaining 4 Atlas conversions, are going to keep Bedek busy through at least Q3 2018. It's possible they decide to keep bringing aircraft aboard, but I do think that there must be some limit to how much more point-to-point they can do without significantly-expanding their origin-airport and/or DC pre-sort facilities, which may then become a wasted capital expense when/if the organic sort hub at CVG comes alive. I do think we will get a sense of this when we see the next iteration of the current network, which I guess will absorb the very-slack Atlas fleet sometime in the next few months.

It should be interesting times again in this forum.
 
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Spacepope
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Re: Amazon Fleet Growth - 2018

Wed Feb 21, 2018 1:38 pm

wjcandee wrote:
Just to kick around the smaller-aircraft theory a bit...

Third, what's the optimal feedstock purchase point when evaluating longevity/reliability? The world's 757 fleet is getting pretty long in the tooth. The market for conversions at this point is pretty thin, even if the feedstock is getting pretty cheap. It's getting pretty-cheap for a reason. Add the cargo conversion cost, and it's not clear that the result is cost-effective for a network like Amazon's, given the expected reliability and longevity of the converted frame. But if it's the right size and there's nothing else, maybe it's the move unless/until the Precision Conversions/PEMCO A321 is certified and suitably-inexpensive feedstock begins to become available. We're talking at least two years for the former and longer for the latter. So that leaves the 737-800 conversions, as the Classic stuff, while still popular for conversions, is getting a bit scarce (with the more-optimal frame being the -400) in suitable frames. I think we'll see those -800s start to be converted in regular-but-small numbers in the near-ish future. Does Amazon move sooner with some Classics? Wait for -800 prices to drop enough to make it typically-viable, or get in early with newer (read: longer longevity, more-reliable) frames? Wait until the 321 conversion market heats up, if it does?


It should be interesting times again in this forum.

Amazon has long since missed the boat on 737 Classic conversions. There's a white paper out on the conversion forecast issued earlier in 2017 that basically states every suitable -400 conversion candidate has already been snapped up. You *could* convert -300s but that would be like Atlas converting a 767-200 nowadays. Likewise the 757s snapped up by DHL, Fedex and Chinese carriers cherry picked from the available feedstock. Delta is running theirs to end-of-life then scrapping them to provide parts to their own fleet, so those are off the table. You could onsie-twosie a fleet of 20-30 but it wouldn't be ideal.

The first A321 conversion has had metal cut, and there are 2 737NG conversion lines operating right now (IAI and China, AEI was supposed to roll their prototype out last year, no word on the holdup). Southwest has finished buying used -700s so the remaining ones of those hitting the used market are probably a parts source now, opening the option to -800s as conversion candidates. On the bright side I doubt engines will be a limiting factor for a while now (though the whitepaper saying WN's 70+ -700 purchase REALLY put a hit on the engine availability market while it was operational) unlike the CF-6 market which will start to bite in the next year or two.

As for the actual employment and making it work... I mean Fedex seems to be fine with the fleet gap between the 757 and ATR-72. Using these smaller aircraft profitably is a headsratcher.
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Re: Amazon Fleet Growth - 2018

Wed Feb 21, 2018 3:00 pm

The rumor mill is churning in regards to smaller aircraft. Word around the hub is that ATSG is shopping AMZ the A321F since ATSG now owns PEMCO, which in turn owns the STC for the conversion. No word on who would fly it or whether AMZ is even interested, but that’s what’s being tossed around right now.
 
Whiplash6
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Re: Amazon Fleet Growth - 2018

Wed Feb 21, 2018 3:18 pm

wjcandee wrote:
Whiplash6 wrote:
Does anyone know anything about 1499a?

Or 1621a?

Or 1667a?

Or 1697a?

And many more that are brand new reserved n-numbers with Atlas Air.


Optimism by Atlas? I haven't heard even a whisper that Amazon is currently planning beyond the 40 767s.

Like I said earlier, I think there's a reasonable possibility that the next tranche of aircraft is smaller than a 767. But who knows? Amazon is good at keeping cards close to the vest, and at some point somebody is going to make a decision about how and when to grow the network beyond its current confines -- although now it has to look at an exclusively point-to-point network for expansion until its organic sort is erected and made functional at CVG, which is years away, if ever. Yes, they've bought a bunch of land and are doing development planning, but somebody has to commit to a gargantuan capital investment that is an order of magnitude larger than what they have done so far if Amazon Prime Airport (tm) is gonna be a reality. And someone is going to have to really evaluate the strengths, weaknesses and limitations of the current air operation before shovels hit the ground. There are doubtless a lot of issues under the surface, some of which I can readily recognize. It will be very interesting to see what the next incremental phase of the existing network ends up looking like.

Candidly, I think Atlas is going to be too expensive to fly something like a 737, especially after the Southern pilot group's payscale bumps up to the current (or future) Atlas one. Bezos's friend at Saltchuk is presumably lobbying for NAC at every turn. (Remember, NAC was flying 737s as part of Project Alpha, which was a companion to Project Aerosmith.)


Sure seems like an awful lot of trouble to pay high Crowe & Dunlevy legal fees to secure 22 prime tail numbers, and waste their time, just based on being optimistic. But weirder things have happened in this industry.
 
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Re: Amazon Fleet Growth - 2018

Wed Feb 21, 2018 3:49 pm

Acey559 wrote:
The rumor mill is churning in regards to smaller aircraft. Word around the hub is that ATSG is shopping AMZ the A321F since ATSG now owns PEMCO, which in turn owns the STC for the conversion. No word on who would fly it or whether AMZ is even interested, but that’s what’s being tossed around right now.


ATSG is gonna be shopping that 321 conversion everywhere, but nothing's gonna be saleable until like late 2019 at the earliest, I think.

As you probably know, CAM and Precision Conversions actually have formed a joint-venture company called 321 Precision Conversions LLC, which would own the STC. Precision has been doing engineering on it (slowly) since like 2011, and I guess they needed $$$ to continue funding that research, and they have never been the strongest marketer. By doing the JV, ATSG gets a jump-start on a future revenue stream for PEMCO and the opportunity to market and benefit from Precision's strong technical reputation, as well as part-ownership of what will likely be the first and among the best STCs for this aircraft. And it's another potential fleet type for CAM to dry-lease to others and AMES to maintain.

Hete and Quint Turner did a roadshow presentation to the Stifel transportation investor conference in Miami recently, and Hete spoke glowingly about the 321 but didn't think that a suitable volume of frames at an acceptable price was going to be available for a couple of years, which is consistent with everything else I have read. So that would be an option for Amazon that wouldn't be the soonest-doable option.

As Spacepope points out, there are a couple of NG conversions already underway, although the commitments aren't huge at the moment. Everybody seems to have run behind expectations in terms of getting their products certified. The BCF finally spit out a deliverable aircraft in December, and IAI got its Alaska conversions done a little earlier, while AEI, which has probably the most firm commitments, still seems to be languishing. Pemco is talking about having their -700 STC by the middle of this year, and I'm sure would be thrilled to put a bunch of NGs to Amazon if it could. I'm no expert on whether the MAX is displacing existing -800s in the volume and speed which might have originally been expected, but my sense is that so far it isn't... Like the 787 pumping the market full of used 767-300s, I think the original estimates might have been somewhat optimistic, but it's not an area of expertise for me.
 
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nikeson13
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Re: Amazon Fleet Growth - 2018

Wed Feb 21, 2018 4:15 pm

If anyone could remember that long ago, this all started as Project Aerosmith in Sep'15 out of ILN, it's been quite awhile and quite a bit has change not only for AMZN but the industry. The first moves of the trial project were low-risk: out of ATSG's ILN base, which has all the resources needed to just start up a air cargo hub overnight. But since then a lot has changed, and there are many more barriers to hurdle.

1) Aircraft - When Aerosmith started, all of the frames were easily found. Some 762s came from DHL ops, others in ATSG/ABX slack, and some were/are being converted. These costs were pretty low to acquire the to-be 40-strong fleet. But now when looking for more a/c, can they double their size to 80 aircraft for the same cost as the first 40 aircraft? I don't think that is currently possible with the lack of 767s to pick up. A330, 777, and most larger a/c are too expensive atm and lack converted numbers. Smaller aircraft availability do not look much better over the next 5 years. Only new 767s look possible, and that brings high costs and risk.

2) Pilots - Numerous carriers are both hiring and increasing pay for pilots, and the ATSG pilot union issues seems to be a big ??? for AMZN. How much is AMZN willing to concede to get AND retain the pilots they need when everyone is fighting for them?

3) How to fill planes? - We know that some routes are very one-sided with volume travel, with more outbound than inbound. How can they effectively fill planes that are only delivering packages? Taking some outside packages will help, but some things have to be rethinked to effectively pan out.

AMZN will probably expand, but what will it look like in a decade from now? Should this be a express air carrier business venture (to make $$ like 5X/FX) or a means to improve AMZN e-commerce, or both? I don't even think AMZN has had a true grand vision for what they want Prime Air to be ATM, thus there's quite a few details to work out.
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wjcandee
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Re: Amazon Fleet Growth - 2018

Wed Feb 21, 2018 4:17 pm

Whiplash6 wrote:
Sure seems like an awful lot of trouble to pay high Crowe & Dunlevy legal fees to secure 22 prime tail numbers, and waste their time, just based on being optimistic. But weirder things have happened in this industry.


Whip: That's a good point. Maybe you've spotted a leading indicator of an Amazon expansion. I wonder whether Atlas would use and "A" suffix on aircraft that aren't actually being dry-leased to Amazon. It sort of has done so with 1709A. (In contrast, ATSG numbered its maintenance spare useable for other work as 395CM rather than using an AZ suffix on it.)
 
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Re: Amazon Fleet Growth - 2018

Wed Feb 21, 2018 4:47 pm

nikeson13 wrote:
How much is AMZN willing to concede to get AND retain the pilots they need when everyone is fighting for them?


Hete said at the Stifel conference that ATSG has had zero difficulty finding pilots to staff its routes. Zero. Nada. True there is some suction at the top of the heap as Fedex and UPS expand and replace retirees, but to hear the management at the ACMI carriers, one might conclude that the "shortage" is significantly wishful-thinking and anecdotal on the part of folks who want a raise. Yes, people are moving vertically at a more accelerated rate than perhaps in recent years, but the supply of acceptable resumes at these carriers is significant, which may explain why pilots at some of these carriers are actively-discouraging others from applying there. That's at least to hear management's side of things. Anecdotally at Atlas, they're having trouble staffing their flying, but management doesn't appear to be singing the same song.

Also, none of this involves any "concessions" by Amazon. Hete made pretty-clear that those 5-year operating agreements were at a fixed price with escalations. But the price isn't renegotiable, apparently, just because of an increase in labor cost. Long term, obviously, if wages go up dramatically across the pool of available carriers, then there will be upward pressure on prices bid by the carriers in the next go-round. This explains why the pilot unions are smart enough to try to do pattern bargaining and raise wages across the board, because if everyone is expensive, then customers are stuck. Of course, other carriers with less-expensive labor are currently out there and eager for business, and the barriers to entry for new carriers aren't all that high. Of course, a new carrier or currently-smaller carrier may not be able reliably to provide a sufficient service level, but the fact that they are out there will always exert some downward pressure on the price the incumbent carriers are willing to bid, and thus on what they can pay in wages.

Amazon can't afford a delivery disruption on the scale of the current DHL disaster at KFC in Britain, of course, and probably wouldn't risk it. But if the price were low enough, who is to say that some of the work couldn't be peeled off and farmed out, the way DHL has been doing for years with ABX Air.
 
wjcandee
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Re: Amazon Fleet Growth - 2018

Wed Feb 21, 2018 8:21 pm

(Warning, thread drift. But I hope you will indulge because it is relevant to the logistics issues that Amazon faces.)

I have been following the Deutsche Dummkoffs latest fiasco in the UK with some amusement.

As background, KFC had been served for many years in the UK by Bidvest Logistics, an arm of an enormous South African logistics company. They use entirely Bidvest-owned delivery vehicles driven by union drivers, and delivered to all of the 900 KFCs in the UK, where people apparently love fried chicken. Bidvest has 6 or more depots across the UK, and never store all of one customer's stuff in any one depot, for redundancy in case there is an a/c or electrical or other failure at any one depot. They, like Sysco in the US, use a shared-vehicle model. So, their DCs have product delivered from suppliers for Pizza Hut, KFC, Burger King, and a bunch of other chains. They store it and then load their trucks with each day's orders for the various chains' restaurants in a given area. So a fridge/freezer truck drives to, say, East SomewhereShire and stops at the Burger King, the Pizza Hut, the KFC, etc., and drops the stuff for each. They have impeccable service: order today, it comes on your regular truck tomorrow. And the shared-truck model is very efficient. And they have the reliability of an all-company-driver and all-company-truck model. Like Sysco. (The difference is that BidVest only stores product; they don't have their own-brand stuff that they also keep in the DC to sell you or to use as makeup if they're out of something, which Sysco does do.)

What DHL did was to build one warehouse to serve the whole country, dedicated exclusively to KFC. So the trucks leave from there to service the whole of the UK. This morning, I saw photos of the tractor-trailers of inbound chicken and such queuing outside the depot, and immediately spotted another important issue nobody had mentioned: the delivery vehicles waiting to be supplied appear to be a hodgepodge of little independent vendors. That's a model that can work very well, but it's infinitely-more-complicated to coordinate, inevitably a mixed-bag of quality and reliability, and I would daresay damn near impossible to set up to service 900 locations flawlessly -- or even acceptably -- from Day One. It explains why the head of the Bidvest union let on that test-runs by DHL, the company that was putting his union members out of work, indicated weeks ago that there were lots of issues, but KFC went ahead with the one-day-complete-cutover to the new system anyway. Relinquishing quality control to save money must have been part of what DHL proudly called "rewriting the book" on how to do this work. Oy.

Apparently, Burger King tried to use DHL to do essentially the same thing six years ago. Within 6 months, they had canned DHL and hired BidVest back. Don't know why KFC thought it would be any different this time.
 
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Spacepope
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Re: Amazon Fleet Growth - 2018

Thu Feb 22, 2018 2:32 am

Whiplash6 wrote:
wjcandee wrote:
Whiplash6 wrote:
Does anyone know anything about 1499a?

Or 1621a?

Or 1667a?

Or 1697a?

And many more that are brand new reserved n-numbers with Atlas Air.


Optimism by Atlas? I haven't heard even a whisper that Amazon is currently planning beyond the 40 767s.

Like I said earlier, I think there's a reasonable possibility that the next tranche of aircraft is smaller than a 767. But who knows? Amazon is good at keeping cards close to the vest, and at some point somebody is going to make a decision about how and when to grow the network beyond its current confines -- although now it has to look at an exclusively point-to-point network for expansion until its organic sort is erected and made functional at CVG, which is years away, if ever. Yes, they've bought a bunch of land and are doing development planning, but somebody has to commit to a gargantuan capital investment that is an order of magnitude larger than what they have done so far if Amazon Prime Airport (tm) is gonna be a reality. And someone is going to have to really evaluate the strengths, weaknesses and limitations of the current air operation before shovels hit the ground. There are doubtless a lot of issues under the surface, some of which I can readily recognize. It will be very interesting to see what the next incremental phase of the existing network ends up looking like.

Candidly, I think Atlas is going to be too expensive to fly something like a 737, especially after the Southern pilot group's payscale bumps up to the current (or future) Atlas one. Bezos's friend at Saltchuk is presumably lobbying for NAC at every turn. (Remember, NAC was flying 737s as part of Project Alpha, which was a companion to Project Aerosmith.)


Sure seems like an awful lot of trouble to pay high Crowe & Dunlevy legal fees to secure 22 prime tail numbers, and waste their time, just based on being optimistic. But weirder things have happened in this industry.

Let's look at this objectively. There is no reason if they are picked up that they will for sure be 767s. Could be, could be a new type. The 16xx number sequence might or might not be significant too. Truth is we probably won't know for a while. Ironically the fist orders of the A321P2F program is 20 frames from a leasing company. Not certain who the final operator is.

I'm a little more optimistic on service entry of the Baby Bus freighter. I'd say surge time this year, early 2019 if the cert program drags badly.
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travaz
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Re: Amazon Fleet Growth - 2018

Thu Feb 22, 2018 2:34 am

My 2 cents. Disclaimer, I have no experience in the Air freight or Airline business but I would like to think I have common sense. I work in public transit planning so we have different cargo. How small should AZ Prime go? I live in Phoenix AZ and spent a lot of years in Grand Canyon and Flagstaff. Fed ex flies a Caravan to FLG everyday. Fed Ex fly's "Milk Runs" around rural AZ. UPS trucks packages to FLG for local distribution. At what point does Amazon shift distribution to other sources? A 737 could do a " Milk Run" across rural AZ (or MO or MT etc) dropping off packages to USPS for last mile delivery. Or should they do a 737 PHX to SAF or OKC? Filling out the network is an interesting question for Amazon. With Amazon's low prices for shipping I think volume is the key. I am not sure the cost of flying 737 or smaller could be justified. Totally open to be proven wrong as I claim no expertise in the matter.
 
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1337Delta764
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Re: Amazon Fleet Growth - 2018

Thu Feb 22, 2018 2:53 am

travaz wrote:
My 2 cents. Disclaimer, I have no experience in the Air freight or Airline business but I would like to think I have common sense. I work in public transit planning so we have different cargo. How small should AZ Prime go? I live in Phoenix AZ and spent a lot of years in Grand Canyon and Flagstaff. Fed ex flies a Caravan to FLG everyday. Fed Ex fly's "Milk Runs" around rural AZ. UPS trucks packages to FLG for local distribution. At what point does Amazon shift distribution to other sources? A 737 could do a " Milk Run" across rural AZ (or MO or MT etc) dropping off packages to USPS for last mile delivery. Or should they do a 737 PHX to SAF or OKC? Filling out the network is an interesting question for Amazon. With Amazon's low prices for shipping I think volume is the key. I am not sure the cost of flying 737 or smaller could be justified. Totally open to be proven wrong as I claim no expertise in the matter.


I know that from the Sortation Center in Phoenix, ground linehaul is linked to specific fulfillment centers. Any fulfillment center that isn't linked to the PHX Sortation Center on a ground linehaul route will use UPS, FedEx, or OnTrac based on my experience. Other than the local fulfillment centers, most of these are concentrated in the Inland Empire of California. Other areas that are linked are Fort Worth and San Marcos, Texas, and Tracy and Sacramento, California (Sacramento might be new, since I just got a package what went via AMZL ground from Sacramento SMF1).

For Air, if the fulfillment center is within easy reach of an Amazon Air airport where the delivery guarantee can be met, it will have priority over UPS 2nd Day Air or FedEx 2 Day from at least in my area. Not sure if that is the case in Flagstaff.

I actually heard that Amazon actually ships a lot of packages from Las Vegas to Flagstaff. Interestingly, I never get any packages from a Las Vegas fulfillment center where I live, which leads me to presume that they aren't linked with the Phoenix Sortation Center on a ground linehaul route, requiring UPS Ground, FedEx Ground/Home Delivery, or OnTrac.
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CX747
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Re: Amazon Fleet Growth - 2018

Thu Feb 22, 2018 3:08 am

I'm not sure what the future holds for Amazon. I do think though that the 737-800 P2F has been greatly overlooked. Conversion lines are up and running and it builds off the 737 "Classic" platform. I don't see the availability in the worldwide A321 fleet for it to be a major player in the foreseeable future.

If I were a betting man, I'd say more 767s are inbound. Known asset, known operator pool and still some feedstock available. If they are feeling frisky they can go 10 used and 10 new for the next 20 frames.
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wjcandee
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Re: Amazon Fleet Growth - 2018

Thu Feb 22, 2018 3:16 am

Trav: When you talk about FedEx milk runs, you're talking about a primarily-overnight product at a premium price that essentially has to travel by air. Which raises the next question: will Amazon decide to take some air overnight in-house? That's a much tougher job, so it will be interesting to see. Where is the low-gaining fruit there?
 
travaz
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Re: Amazon Fleet Growth - 2018

Thu Feb 22, 2018 3:31 am

wjcandee wrote:
Trav: When you talk about FedEx milk runs, you're talking about a primarily-overnight product at a premium price that essentially has to travel by air. Which raises the next question: will Amazon decide to take some air overnight in-house? That's a much tougher job, so it will be interesting to see. Where is the low-gaining fruit there?

That is true about FedEx but Amazon does offer 1 or 2 day shipping on a lot of their products. The distances on the East Coast are doable by ground for 2 day and a lot of 1 day shipping. I guess because my life revolves around a lot of the rural west, where the distances can be pretty large, at what point does air trump ground?
 
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Spacepope
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Re: Amazon Fleet Growth - 2018

Thu Feb 22, 2018 3:34 am

The thing is, air freight or road, Amazon has grown to such a size that no matter what everyone else is also competing for those same ton-miles. When the truckers are all bought up and things have to move... add to the mic a 767 can move in a day what several trucks will need a week to do. Perhaps the "small" freighter will happen, but I think we are looking at service to Kansas City over Flagstaff.
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travaz
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Re: Amazon Fleet Growth - 2018

Thu Feb 22, 2018 3:47 am

Spacepope wrote:
The thing is, air freight or road, Amazon has grown to such a size that no matter what everyone else is also competing for those same ton-miles. When the truckers are all bought up and things have to move... add to the mic a 767 can move in a day what several trucks will need a week to do. Perhaps the "small" freighter will happen, but I think we are looking at service to Kansas City over Flagstaff.



I think that that is correct. I agree Flagstaff is not going to get a 737 or even a Caravan from Amazon. I guess what I was thinking is that Amazon has a ubiquitous last mile delivery organization in every address in the US. The USPS has a post office at the bottom of Grand Canyon on the Havasupi Reservation for example so could Amazon set up a network to the point (Air or Ground) where it is Amazon and the USPS only?
 
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Re: Amazon Fleet Growth - 2018

Thu Feb 22, 2018 3:49 am

Note that the PHX8 Sortation Center handles ground packages for the Albuquerque area that ship from one of the Phoenix area fulfillment centers and are last mile delivered by the USPS.
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Re: Amazon Fleet Growth - 2018

Thu Feb 22, 2018 4:26 am

Spacepope wrote:
Let's look at this objectively. There is no reason if they are picked up that they will for sure be 767s. Could be, could be a new type. The 16xx number sequence might or might not be significant too. Truth is we probably won't know for a while. Ironically the fist orders of the A321P2F program is 20 frames from a leasing company. Not certain who the final operator is.

I'm a little more optimistic on service entry of the Baby Bus freighter. I'd say surge time this year, early 2019 if the cert program drags badly.

I missed the order for A321P2F being from a leasing company. Which one? In other words, is the customer public? If not, we could speculate it is Amazon...

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Re: Amazon Fleet Growth - 2018

Thu Feb 22, 2018 5:27 am

travaz wrote:
Spacepope wrote:
The thing is, air freight or road, Amazon has grown to such a size that no matter what everyone else is also competing for those same ton-miles. When the truckers are all bought up and things have to move... add to the mic a 767 can move in a day what several trucks will need a week to do. Perhaps the "small" freighter will happen, but I think we are looking at service to Kansas City over Flagstaff.



I think that that is correct. I agree Flagstaff is not going to get a 737 or even a Caravan from Amazon. I guess what I was thinking is that Amazon has a ubiquitous last mile delivery organization in every address in the US. The USPS has a post office at the bottom of Grand Canyon on the Havasupi Reservation for example so could Amazon set up a network to the point (Air or Ground) where it is Amazon and the USPS only?


Absolutely. USPS is an important part of the mix, but you have to get the packages to them by 8am to be delivered that same day. So to do an overnight service, you have to get the packages to the nearest Sortation Center by X time for it to get out the door soon enough to make it to the USPS on time. And count backwards, and count backwards, and count backwards to when it has to be being boxed up at the DC.
Two days is doable from a wide distance. One day is a lot tougher. A lot of "next day" on the East Coast goes by UPS Ground and such, because they get it there overnight from some pretty-substantial distances. If all you have is a day sort on the air side, then you can never use Prime Air to do overnight. One benefit of Prime Air, according to an Amazon interview I saw, goes the other way. The cutoff time for 2-day service is much later for West Coast originations going East now that they're doing it themselves through a day sort. So that's why I posed the question.

I understand what you're saying about "milk runs" -- just the type of service, not the aircraft. Got it. A Caravan works for high-revenue stuff that has to get there overnight, a lot of which isn't parcels, into areas that you couldn't serve overnight but for the use of aircraft because otherwise you'd run out of time. Into a smaller node that still justifies Amazon Air service, one might think to use the size of aircraft we are talking about: 737-700 to 757, and options in between.
 
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Re: Amazon Fleet Growth - 2018

Thu Feb 22, 2018 5:31 am

lightsaber wrote:
Spacepope wrote:
Let's look at this objectively. There is no reason if they are picked up that they will for sure be 767s. Could be, could be a new type. The 16xx number sequence might or might not be significant too. Truth is we probably won't know for a while. Ironically the fist orders of the A321P2F program is 20 frames from a leasing company. Not certain who the final operator is.

I'm a little more optimistic on service entry of the Baby Bus freighter. I'd say surge time this year, early 2019 if the cert program drags badly.

I missed the order for A321P2F being from a leasing company. Which one? In other words, is the customer public? If not, we could speculate it is Amazon...

Lightsaber


Vallair placed an order for 10 last year, with another order for 10 this year at the Singapore air. Show.
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wjcandee
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Re: Amazon Fleet Growth - 2018

Thu Feb 22, 2018 5:44 am

lightsaber wrote:
I missed the order for A321P2F being from a leasing company. Which one? In other words, is the customer public? If not, we could speculate it is Amazon...

Lightsaber


It's Vallair. They're a France/Luxembourg group with a lot of bravado and a relatively-small footprint at the moment. Their basic business is buying up what they themselves characterize as "end-of-life" A320s and 737s, and old CFM engines, for the kinds of purposes people buy such things. They have bought, over the years, about 20 of each.

Vallair is the launch customer for the Precision/PEMCO A321 conversion. They delivered the airframe for the prototype in 3Q 2017, and have "options" to buy like 10 of them, provided someone can come up with the feedstock, which is I guess what they're trying to do. ATSG is predicting late 2019 for redelivery (and STC).

Vallair is also the launch customer for the EFW (ST Aero) A321 conversion, with an "order" for 10 of them. The timetable for that exercise is somewhat more ambitious: they plan to deliver an airframe to ST Aero in mid-2018, and expect to redeliver at the end of 2019.

You can read the press-releases, which are mostly self-aggrandizing BS as far as I can tell, talking about how Vallair's "engineers" are going to make them a "center of excellence" blah blah blah.

Getting a prototype certified and out the door is a far cry from finding less-than-"end of life" A321s at a favorable price to put through the process, so we'll see how this goes.

And maybe I'm becoming a grouchy old-timer, but that's why I have my doubts about whether we're gonna see anything in real volume until long after 1/1/20. That and the fact that the people in the photos accompanying the press releases look like finance types and not the kind of folks we normally see as involved in MRO stuff and, frankly, the cargo industry in general. But again, maybe that's just me.

I'm always happy politely to be shown to be wrong, especially when I am grouchily-opinionated about something. (My girlfriend does this on a remarkably-regular basis. :-) ) But I just don't think that if Amazon is trying to scoop up 20 A321 conversions, they're going to do it through these guys. Why not just go to CAM, who has kind of an in with the conversion house; heck, they basically are the conversion house. And what they managed to do in quickly locking down a good number of ex-Qantas and ex-AA 767 airframes has been pretty-impressive. (The Qantas ones because they got quality frames at a good price; the AA ones because they I guess ended up being right that those frames' highest and best use wasn't as PBR* cans.)



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wjcandee
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Re: Amazon Fleet Growth - 2018

Thu Feb 22, 2018 6:20 am

I misspoke. The EFW conversion's ambitious timetable is to start cutting on metal "near the end" of 2018 and have a deliverable prototype by the end of 2019. It's ST Aero, so it's believable, but it's ambitious.
 
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Re: Amazon Fleet Growth - 2018

Thu Feb 22, 2018 6:27 am

travaz wrote:
My 2 cents. Disclaimer, I have no experience in the Air freight or Airline business but I would like to think I have common sense. I work in public transit planning so we have different cargo. How small should AZ Prime go? I live in Phoenix AZ and spent a lot of years in Grand Canyon and Flagstaff. Fed ex flies a Caravan to FLG everyday. Fed Ex fly's "Milk Runs" around rural AZ. UPS trucks packages to FLG for local distribution. At what point does Amazon shift distribution to other sources? A 737 could do a " Milk Run" across rural AZ (or MO or MT etc) dropping off packages to USPS for last mile delivery. Or should they do a 737 PHX to SAF or OKC? Filling out the network is an interesting question for Amazon. With Amazon's low prices for shipping I think volume is the key. I am not sure the cost of flying 737 or smaller could be justified. Totally open to be proven wrong as I claim no expertise in the matter.


I was pondering much of the same thing, at some point it makes sense just to let UPS take care of the smaller cities that don't generate enough volume on Amazon alone.

That being said I was also pondering how I'd work around one way flows with smaller planes, and in my former life as a transportation analyst and planner (trucks..) we dealt with deadheads all the time, and the goal was of course to minimize them.

But the pattern that I'm pondering for a A321 sized jet is:
CVG Hub->Middle sized city->City, with an AMZN FC that is nearish to the previous middle sized city->CVG Hub

So an example of that would be Amazon doing something like CVG-BUF-ABE-CVG triangle, where the BUF-ABE leg is mostly, if not completely empty. (I've lost track of what the Amazon network looks like now, so that example might not make too much sense, I know ABE is a node, but not sure if it has an FC. I went looking for a post on it, but I couldn't find a recent one of wjcandee's excellent posts summarizing everything thats going on.) That'd give you more uplift on the ABE-CVG leg to feed the CVG hub even more.

I don't think we'll ever see Amazon doing milkruns, but perhaps they could go back to some All American Aviation day technology and drop off shipments without landing. They'd probably have to get a C130 or something and a really bit landing zone...
 
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Re: Amazon Fleet Growth - 2018

Thu Feb 22, 2018 9:13 am

Question, how often do deliveries from TLV land at PSM?

I had actually run into the crew for 1399 and struck up a conversation with them but didn't know who they were. Then I came home and checked anet and was like ooooooooh it makes sense now. (side note- the two men who were presumably Israeli I thought were German for the entire conversation, was a little amused with myself)
 
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Re: Amazon Fleet Growth - 2018

Thu Feb 22, 2018 1:19 pm

Jouhou wrote:
Question, how often do deliveries from TLV land at PSM?

I had actually run into the crew for 1399 and struck up a conversation with them but didn't know who they were. Then I came home and checked anet and was like ooooooooh it makes sense now. (side note- the two men who were presumably Israeli I thought were German for the entire conversation, was a little amused with myself)


Quite a few of the Atlas birds were delivered straight from TLV to PSM
 
Whiplash6
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Re: Amazon Fleet Growth - 2018

Sat Feb 24, 2018 8:51 pm

wjcandee wrote:
Whijplash6 wrote:
Sure seems like an awful lot of trouble to pay high Crowe & Dunlevy legal fees to secure 22 prime tail numbers, and waste their time, just based on being optimistic. But weirder things have happened in this industry.


Whip: That's a good point. Maybe you've spotted a leading indicator of an Amazon expansion. I wonder whether Atlas would use and "A" suffix on aircraft that aren't actually being dry-leased to Amazon. It sort of has done so with 1709A. (In contrast, ATSG numbered its maintenance spare useable for other work as 395CM rather than using an AZ suffix on it.)



All I know is 1499a is a 767-300 registered to Atlas Air that no one here knows anything about. It’s certificate issue date is 01/25/2018. Very peculiar.
 
wjcandee
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Re: Amazon Fleet Growth - 2018

Sat Feb 24, 2018 9:35 pm

Whiplash6 wrote:
All I know is 1499a is a 767-300 registered to Atlas Air that no one here knows anything about. It’s certificate issue date is 01/25/2018. Very peculiar.


Looks like another ex-S7 frame one going through conversion soon.

ATSG and Atlas do the process a little differently. Generally, Atlas has been titling the aircraft to itself (care of qa/qc, purchase, ny) when it buys it, and renumbers it then. When the aircraft is in conversion, it stays registered to Atlas. It moves to and from the conversion house with Atlas crews, I believe. And, as I say, it has its final tail number generally from right before it moves from wherever it is stored. After it is redelivered from the conversion house and painted, it sits at MIA or somewhere else Atlas-y for a few days. Usually somewhere in that time it is retitled to Titan or Andromeda or a single-purpose entity. At that point, it is or has been officially dry-leased to Amazon. So...with respect to this aircraft, it is titled to Atlas and not yet put in the leasing entity for lease to whomever.

ATSG, in contrast, typically leaves the aircraft with its previous number throughout conversion. Usually, we see the aircraft registered to CAM right before it starts to move from where it is stored. It goes then to ILN for a few days (or more), and then to the conversion house. It is apparently moved using contract crews, not one of the crews from an ATSG airline. It stays in the original number (if it's an N-number) throughout conversion. It is moved back and painted, same way. Finally, post-paint, it is moved back to ILN. At or around the time that it is put onto the Airline's certificate and dry-leased to Amazon, it gets its AZ number. So we can kind of tell what stage it's in by where in each of these processes it is in.

Bottom line is either that more aircraft are being made partially-available to Amazon -- like 1709A -- or being made ready to dry-lease to Amazon beyond the 20, or Atlas has decided that "A" prime numbers aren't exclusively going to be used for Amazon.
 
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Re: Amazon Fleet Growth - 2018

Mon Feb 26, 2018 7:57 am

Whip: A shorter version of my last post should have been as follows.

You're right. It's weird. Either this is in fact evidence that Amazon is going past 20 or that there will be some substitutions in the Atlas/Amazon dry-lease fleet, OR it's an indication that A tail numbers aren't just for dry-leases to Amazon in whole or part.
 
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Re: Amazon Fleet Growth - 2018

Mon Feb 26, 2018 7:06 pm

RE Whip's observation. Curiouser and curiouser.

From The LoadStar's discussion of Atlas's earnings announcement, which I received in my emailbox this morning: "The carrier, which now has 12 767-300s operating for Amazon, with the remaining eight set to deliver monthly through this year, said it had also identified six more in the market and it was “looking at them”."

I'm pretty sure that I don't just get to put aircraft at a customer just because I "identify them in the market", and Atlas has plainly done more than just look at them; they bought at least some of them.

Now Flynn did say with respect to 747s that they were proactively leasing in a few in anticipation of being able to put them to use, in order to lock them in at favorable prices as the market tightens. So maybe that's what they're doing with these 767s. Fact is that CAM has a nice business right now leasing converted 767-300s to cargo carriers, and has already placed with customers everything that they have in conversion and have lined up for conversion this year, so maybe the worst thing that happens if Amazon doesn't take these six is that Titan dry-leases them to someone who otherwise would have leased from CAM. I don't get the "A" tail numbers, though. (He also observed that the 748 line is sold out for a couple of years -- well, DUH, because you guys didn't order any more and so they slowed the line -- so I don't know what that's about.)
 
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Re: Amazon Fleet Growth - 2018

Tue Feb 27, 2018 2:05 am

Has 387AM left TLV yet? I haven't seen anything on flightaware. I haven't heard of it arriving to CVG or ILN either. Still waiting to get a picture of it here in the US with the old paint scheme before it gets repainted to what ever it is.
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Re: Amazon Fleet Growth - 2018

Tue Feb 27, 2018 2:57 am

wjcandee wrote:
RE Whip's observation. Curiouser and curiouser.

From The LoadStar's discussion of Atlas's earnings announcement, which I received in my emailbox this morning: "The carrier, which now has 12 767-300s operating for Amazon, with the remaining eight set to deliver monthly through this year, said it had also identified six more in the market and it was “looking at them”."

I'm pretty sure that I don't just get to put aircraft at a customer just because I "identify them in the market", and Atlas has plainly done more than just look at them; they bought at least some of them.

Now Flynn did say with respect to 747s that they were proactively leasing in a few in anticipation of being able to put them to use, in order to lock them in at favorable prices as the market tightens. So maybe that's what they're doing with these 767s. Fact is that CAM has a nice business right now leasing converted 767-300s to cargo carriers, and has already placed with customers everything that they have in conversion and have lined up for conversion this year, so maybe the worst thing that happens if Amazon doesn't take these six is that Titan dry-leases them to someone who otherwise would have leased from CAM. I don't get the "A" tail numbers, though. (He also observed that the 748 line is sold out for a couple of years -- well, DUH, because you guys didn't order any more and so they slowed the line -- so I don't know what that's about.)


It seems like a few carrier's have had to look hard to find additional 747s after UPS said YES PLEASE and bought out out a few years worth of production. I always chuckle when a management type makes comments like that. It shows that some folks think they operate in their ow bubble.
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wjcandee
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Re: Amazon Fleet Growth - 2018

Tue Feb 27, 2018 12:04 pm

N7375A is finally on a Bedek test flight this morning (7am EST on 2/27/18).

Meanwhile, N387AM doesn't seem to have moved towards the US yet.
 
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yochai
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Re: Amazon Fleet Growth - 2018

Tue Feb 27, 2018 1:34 pm

N387AM's departure has been pushed several times over the past few days, seems like a substantial issue, right now no new ETD is published.
 
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Re: Amazon Fleet Growth - 2018

Tue Feb 27, 2018 5:01 pm

yochai wrote:
N387AM's departure has been pushed several times over the past few days, seems like a substantial issue, right now no new ETD is published.


Thank you as always, Yochai!!
 
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1337Delta764
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Re: Amazon Fleet Growth - 2018

Wed Feb 28, 2018 2:12 am

One thing to wonder is how are Amazon Air's HNL operations going to work. I haven't heard anything about them opening a Sortation Center in Honolulu/Oahu. Will packages instead be handed to the USPS at HNL for the USPS to sort, instead of at the DDU level? If that is the case, I see that having no benefit over UPS or FedEx which are sometimes used for Hawaii shipments (nearly always used if the customer purchases Expedited or Priority Shipping). This would only be an improvement over ParcelPool (International Bridge) and maybe about the same as USPS Priority Mail in shipping time.
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travaz
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Re: Amazon Fleet Growth - 2018

Wed Feb 28, 2018 2:22 am

1337Delta764 wrote:
One thing to wonder is how are Amazon Air's HNL operations going to work. I haven't heard anything about them opening a Sortation Center in Honolulu/Oahu. Will packages instead be handed to the USPS at HNL for the USPS to sort, instead of at the DDU level? If that is the case, I see that having no benefit over UPS or FedEx which are sometimes used for Hawaii shipments (nearly always used if the customer purchases Expedited or Priority Shipping). This would only be an improvement over ParcelPool (International Bridge) and maybe about the same as USPS Priority Mail in shipping time.


This is a situation where Amazon IMHO could except outside cargo going to HI. Especially on HNL to Mainland leg which I would think is almost a dead head.
 
wjcandee
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Re: Amazon Fleet Growth - 2018

Wed Feb 28, 2018 2:28 am

Amazon could presort the cargo (or airport sort the cargo) to the NDC (formerly BMC) level, if USPS had one in Hawaii, which I think they don't.

So, they could presort to the SCF level, of which there is definitely one in Honolulu.
 
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yochai
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Re: Amazon Fleet Growth - 2018

Wed Feb 28, 2018 10:44 am

N387AM is finally out on delivery to SNN
 
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Re: Amazon Fleet Growth - 2018

Wed Feb 28, 2018 3:25 pm

An intuitive assessment of shipments to Hawaii would seem to dictate a distribution center on the islands with the 1000 or two most common items shipped by ship. That doesn't seem to be the case. Anyone have a wrap on possible numbers for boats versus planes for most items? Then of course there is barging between the various islands. Again anyone have a guess as to the $$ numbers?
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Re: Amazon Fleet Growth - 2018

Wed Feb 28, 2018 3:44 pm

frmrCapCadet wrote:
An intuitive assessment of shipments to Hawaii would seem to dictate a distribution center on the islands with the 1000 or two most common items shipped by ship. That doesn't seem to be the case. Anyone have a wrap on possible numbers for boats versus planes for most items? Then of course there is barging between the various islands. Again anyone have a guess as to the $$ numbers?


I believe that Amazon shipping to Hawaii currently uses a variety of carriers, from UPS and FedEx air services, to USPS First Class and Priority Mail, to ParcelPool (International Bridge), and is never consistent. I know for Puerto Rico Amazon also recently started using UPS Mail Innovations since they have a dedicated flight from MCO to SJU where packages are dropped at the USPS SCF in San Juan; not sure if they have a similar flight for HNL from the West Coast.
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cmairplaneman
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Re: Amazon Fleet Growth - 2018

Thu Mar 01, 2018 2:58 am

Now that N7375A has been test flown, any idea when it’ll be departing TLV for CVG Zoe ILN?
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wjcandee
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Re: Amazon Fleet Growth - 2018

Fri Mar 02, 2018 1:57 pm

So 387AM is going to ROW today for painting at Dean Baldwin.
 
cmairplaneman
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Re: Amazon Fleet Growth - 2018

Fri Mar 02, 2018 2:52 pm

It’s supposed to take off at 10:00 but I hope it can wait to take off until 2 (very unlikely) so I can go down there’s to get a picture of it before 387 gets repainted!
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