Amazon scales back cargo flying as demand cools, contractor says

One of Amazon's cardinal aerial cargo operators said Monday that the e-commerce elephantine is scaling backmost connected flights this year, citing little request and slower economical growth.

Air Transport Services Group, which runs a important information of Amazon's aerial cargo fleet, said it expects to run Boeing 767 freighters dedicated to servicing Amazon and DHL astatine reduced schedules and little formation clip per aircraft.

"Both companies are adjusting their crushed and aerial organisation and fulfillment networks successful the United States to conform to reduced U.S. economical maturation and user spending levels successful the archetypal fractional of 2023," ATSG said.

Air cargo rates, which surged successful caller years owed to larboard congestion and precocious request for accelerated deliveries, person slumped. The Baltic Air Freight Index was down much than 33% connected Jan. 30 from a twelvemonth earlier. The International Air Transport Association said past period that aerial cargo request successful November was down astir 14% from the year-ago period, portion capableness fell 1.9%.

Meanwhile, rider airlines person said question request has held up arsenic consumers prioritize trips and different experiences.

But coming disconnected Amazon's weakest twelvemonth for growth successful its 4th period arsenic a nationalist company, CEO Andy Jassy has taken steps to curtail expenses. That includes cutting much than 18,000 jobs, pausing warehouse enlargement and shuttering immoderate projects.

Amazon built retired its fulfillment and logistics web astatine a frenzied gait during the Covid pandemic, arsenic request for e-commerce surged. Since then, rising ostentation and a slowdown successful user spending has forced Amazon to downsize. The institution has weighed selling excess abstraction connected its cargo planes to different airlines, Bloomberg reported past December.

ATSG said Monday that Amazon whitethorn not widen its leases connected 5 Boeing 767-200 freighters, which are owed to expire betwixt May and September. Amazon opted to proceed leasing 4 767-200s into 2024, it added.

Shares successful ATSG slumped 9% successful day trading. Amazon's banal fell astir 1%. Representatives from some companies didn't instantly respond to a petition for comment.

Amazon successful October hired Hawaiian Airlines to alert large, rented Airbus cargo jets, and said it would discontinue immoderate older planes.

Through Amazon Air, the institution has built up a burgeoning aerial web to power much aspects of the transportation process and guarantee faster delivery. It invested successful ATSG and Atlas Air Worldwide Holdings, though Atlas agreed past twelvemonth to beryllium taken backstage by an capitalist group. Amazon besides contracted with passenger hose Sun Country to supply crews and planes to alert packages. The e-retailer typically leases freighters from its aerial contractors, but it has besides purchased utilized jets from Delta and WestJet.

In summation to Amazon and DHL reducing their aerial cargo schedules, transportation elephantine FedEx has besides announced cost-cuts that see parking planes and cutting immoderate firm jobs.

WATCH: How the pandemic shifted however Boeing and airlines deliberation astir aerial cargo