Dive Brief:

• Amazon plans to build a cargo hub at the Cincinnati/Northern Kentucky Airport in Hebron, KY as the e-commerce goliath continues to expand its Prime Air delivery program.

• The $1.49 billion facility will create more than 2,000 jobs in the area, including loading, unloading and sorting packages coming in and out of the hub, according to a press release.

• Earlier this month Amazon announced that it would add some 100,000 full-time, full-benefit jobs in Texas, California, Florida, New Jersey and “many other states across the country” over the next 18 months, on top of the 150,000 U.S. jobs the company has added over the past five years, mainly in new fulfillment centers. 

Dive Insight:

In August, Amazon revealed its first Prime Air-branded cargo aircraft to great fanfare in an inaugural flight during Seattle’s famous Seafair Air Show. The Boeing 767-300, dubbed Amazon One, was among the first 11 planes flying for Amazon through air cargo partners Atlas Air and ATSG in conjunction with the e-retail giant’s ambitious logistics and fulfillment efforts. Amazon said Tuesday that the Prime Air transportation network is expanding to 40 leased planes over the coming months, with 16 of them now in service.

Many of the new jobs announced by Amazon in recent weeks are positions in new fulfillment centers the company has opened nationwide, spurred in part by growth in its third-party Marketplace platform. (There’s speculation that some of them are planned for Amazon’s expanding physical store plans, too.) Many sellers depend on Amazon’s fulfillment network to fill orders, and at least half of the goods sold on Amazon’s site now come through Marketplace, Amazon announced in November.

But Amazon's shipping and fulfillment costs are weighing it down, at least during this time of scaling up: The company in October logged its sixth straight profitable quarter, but operating expenses of $32.1 billion (a 29% increase from $24.9 billion in Q3 last year) undid that almost totally. Amazon’s much-touted fulfillment and shipping ambitions look to have finally caught up with it: Those costs rose more than sales. Amazon’s air cargo ambitions were further complicated over the holidays by striking pilots who said they were being inappropriately denied time off.  

The Kentucky Prime Air hub joins Amazon’s worldwide network of 149 fulfillment centers and more than 20 sortation centers noted for leveraging algorithms, robotics, machine learning and other solutions designed to boost delivery speeds. Amazon recently received a U.S. patent for a new kind of robot capable of packing orders to prepare them for shipment: The patent describes how “robotic arms may be utilized to grasp inventory items within an inventory system. Information about an inventory item to be grasped can be detected and used to determine a grasping strategy in conjunction with information from a database. Instructions for grasping an inventory item can be generated based on the detected information and the database.”