Dive Brief:

• Amazon has made good on reports that it would develop its own freight capabilities, finalizing a lease on 20 Boeing 767 freighter jets from Air Transport Services Group Inc., the companies said Wednesday.

• The agreement includes the operation of the aircraft by ATSG’s airlines, ABX Air, and Air Transport International, and gateway and logistics services provided by ATSG’s LGSTX Services. The 20 leases are for five to seven years, while the agreement for operation of the aircraft is for five years.

• The move has been reported for months, but now that it's confirmed it's a further sign that Amazon is taking on more fulfillment operations, presumably in an effort to speed up deliveries and cut its mounting delivery costs. 

Dive Insight:

Amazon has insisted so far that its moves into freight transport—it’s also bought thousands of trailer trucks and has registered as an ocean freight forwarder, according to a listing with the U.S. Federal Maritime Commission—serves its own fulfillment needs and is not an attempt to compete with United Parcel Service and FedEx.

Yet recently Amazon has taken up deliveries for third parties, including those in its own marketplace, and buzz continues over whether the e-retail giant is making a serious play as a shipper. Robert W. Baird & Co. analyst Colin Sebastian is widely quoted these days regarding his belief that Amazon is capable of making delivery a revenue-generating aspect of its business.

“They have the opportunity to disrupt this market and generate a lot of revenue,” Robert W. Baird & Co. analyst Colin Sebastian told the Seattle Times last month. 

Less often heard are the doubters, but Morgan Stanley analyst Brian Nowak doesn’t think Amazon is going to make the huge investment it would take for the sake of dubious returns. In fact, Nowak doesn’t even think that Amazon will end up delivering all of its own packages, reports the Financial Times. If anything, Amazon's new jets might help it decrease fulfillment costs that have accumulated as Amazon continues to promote it's Prime membership and the two day free shipping that comes with it. Delivery costs were up 37% year-over-year in Q4 to $1.8 billion, and are growing faster than its revenue, which increased 22% to $35.7 billion in the same period.