Amazon to build $1.5bn US cargo hub

Online retailer Amazon has announced plans to build an air cargo hub at the Cincinnati/Northern Kentucky Airport in Hebron, US, to support its growing fleet of aeroplanes.

The company expects to create more than 2,000 new jobs when the site opens.

Building the hub will cost close to $ 1.5bn (£1.19bn).

The move signals the company’s continued expansion into transporting, sorting and delivering its own packages.

Last year, Amazon entered into agreements to lease 40 dedicated Prime Air cargo planes.

So far, 16 planes are in service for Amazon customers, with more rolling out over time.

Amazon’s site currently lists in excess of 30 carriers that are used to transport packages, including delivery giants United Parcel Services and FedEx.

By establishing its own cargo hub, the expectation is that Amazon will gradually take more control over the entire process of getting items to customers once ordered.

Steve Banker, vice-president of supply chain services at consulting company ARC Advisory Group, said this is a sign of Amazon “ramping up” its business.

“Amazon still loses money on deliveries, the IT service side of their business supports the retail operations. Owning the whole chain cuts out the middleman fees,” said Mr Banker.

Economic boost

The Governor of Kentucky, Matt Bevin, said the plans for the cargo hub were “exciting”.

“Kentucky’s ideal location, proven workforce and an already extensive shipping and logistics industry have been the backbone of our relationship with Amazon for nearly 20 years.

“This new project will pay dividends to both the company and our state and we are truly grateful for the jobs and economic impact it will bring.”

The chief executive of the airport, Candace McGraw, called the hub “transformational” for the economy and businesses in the area.

Last month, Amazon said it will create 100,000 new, full-time jobs across the US by mid-2018 and also revealed plans to open new warehouses in Texas,Maryland and Colorado.

The company also completed its first commercial drone delivery in the UK at the end of last year, with a package delivered to an address in Cambridge 13 minutes after being ordered.

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BBC News – Technology