Amazon to Expand Prime Air Operations at CVG Air Hub

Source: Amazon

CVG, or better known as the Cincinnati/Northern Kentucky International Airport, a passenger hub for Delta Airlines and a cargo hub for DHL and Amazon Air, will see further expansion by Amazon.

The company purchased 210 acres at the airport, and this is one more step in the process to bring the company’s own air hub to fruition at CVG.

“This is great news for Amazon, CVG, and our region as it is further investment in Cincinnati/Northern Kentucky, and adds to Amazon’s Air hub development at our airport. We appreciate the partnership with Amazon, and look forward to the tremendous positive impact this project will have on our local economy.”

Candace McGraw, chief executive officer, CVG

Amazon Air’s CVG air hub is expected to bring a total of 2,700 jobs to the airport to support the growing fleet of Prime Air cargo planes.

Amazon Air and DHL

Amazon planes already use CVG as their centralized air distribution hub. But to date, the company has been working with DHL to manage cargo operations.

CVG is one of three major global hubs for DHL and the company continues to invest at the airport as global trade is booming. Since 2009, the logistics company spent more than $280 million and brought over 900 jobs to region.

Source: Amazon

In the current cooperation with DHL, Amazon Air is using the DHL facilities to load and unload Prime Air planes during the day.

DHL mostly operates at night, so this working relationship takes advantage of an opposite schedule to minimize operational conflicts.

But is there more to this cooperation than just an initial operational sharing of ramp facilities?

Amazon Global Air Cargo Expansion

Why did Amazon pick Cincinnati/Northern Kentucky International Airport?

Afterall, Amazon could have picked Memphis (FedEx) or Louisville (UPS), which would have given them better access to those global logistics networks. And both already work with Amazon on domestic parcel delivery.

Or if the company thought about doing it all alone, why not pick another central airport in the Midwest? St. Louis for example.

Once a major hub for TWA and Ozark airlines (both purchased by American Airlines), St. Louis airport is trying to revive Lambert Airport (STL) from the losses of passenger traffic and defense contractor activity during the cold war.

McDonnell Douglas, among others, called the airport home during that period and certainly there must be a lot of existing real estate that could be converted to cargo operations.

Certainly, St. Louis would have welcomed Amazon Air with open arms and possibly provided hefty tax incentives to lure cargo operations to the airport.

Amazon Air and DHL – The Global Partnership?

It has been speculated that Amazon and DHL may work together at CVG to expand the giant retailer’s global reach. Globally, DHL has a vast network of logistics resources, so tapping into that resource could allow Amazon to move more goods between continents.

In the U.S., DHL has mostly ceded the domestic delivery market to UPS and FedEx. An attempt at domestic air and ground delivery didn’t last very long and was shut down in 2008. Since then the company put its focus back on international cargo operations.

DHL leads the way working with the military, government agencies, non-profits, educational institutions, and more to offer fast palletized cargo operations. The company’s global network, in which the CVG DHL Air hub is a pivotal piece, makes it a perfect logistics partner for many organizations.

Source: DHL

Continuing the cooperation with Amazon would make sense for both companies. The fact both are utilizing CVG as their air hub make it easy to incorporate a domestic Amazon Air network with a global DHL network.

And that is a win-win for both companies and the local economy.

If this speculation turns into reality, for marketplace sellers there could be a future of streamlining global distribution of products in Amazon FBA warehouses.

This could have a profound disruptive impact on cross-border trade. And it makes Cincinnati more than just a dark horse candidate for Amazon HQ2.

What do you think about Amazon Air expansion at CVG or the possibility of a future with DHL? Drop us a line in the comments section below.

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