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3/10/2016 10:05:00 AM Write a Letter to the Editor Write a letter to the Editor

FedEx Says Amazon Air Freighter Lease Was Expected

Chris Keane/FedEx

FedEx Corp. officials weren't surprised by the March 9 confirmation that e-commerce giant Amazon has agreed to lease 20 air freighters and buy a stake in Air Transport Services.

Amazon said it has finalized an agreement to lease Boeing 747 freighters from the Wilmington, Ohio-based transport company as part of a push to build out U.S. delivery infrastructure.

FedEx officials have maintained they don't view Amazon's growing transportation capability as a serious threat to the major players in e-commerce deliveries: FedEx, UPS Inc. and the U.S. Postal Service.

“Today’s announcement is not a surprise," said Patrick Fitzgerald, FedEx senior vice president of  integrated marketing and communications. "We work closely with Amazon and have been aware for some time about their need for supplemental air capacity related to inventory management. Amazon continues to be a valuable FedEx customer.”

Amazon has been adding sorting centers and delivery trucks to keep pace with business volume.

Amazon said  the goal is not to compete with package delivery carriers such as FedEx and UPS but to improve logistics to serve customers better.

The aircraft leases are for five to seven years. The agreement for the operation of the aircraft will be for five years.

Amazon also is taking a stake in ATS. It will get warrants to buy during a five-year period up to 19.9% of the company's shares at $9.73 per share.

Dave Clark, Amazon's senior vice president of worldwide operations and customer service, said in an e-mail statement that the agreement will help supplement its existing delivery network and ensure the company has the air cargo capacity to support one- and two-day delivery for its customers.

FedEx ranks No. 2 and UPS No. 1 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.

By Wayne Risher
The (Memphis, Tenn.) Commercial Appeal


Distributed by Tribune Content Agency, LLC.

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