Dive Brief:

• Amazon is investigating the launch of its own air-freight operation over the next few years, starting with up to 25 leased cargo planes, sources have told the Wall Street Journal. 
• The company is reportedly in talks with Atlas Air and Air Transport Services Group to lease the planes, which would reduce reliance on FedEx, UPS, and other carriers. 
• Amazon is increasing its control over delivery operations, employing or contracting trucks, drivers and couriers, as well as continuing development of drone delivery. 

Dive Insight:

Sources told the Journal that Amazon may be ready to bring bulk-freight operations in-house to reduce reliance on third-party carriers such as FedEx and UPS. The company is testing cargo aircraft operations in partnership with Air Transport Services Group, and is reportedly looking to launch a fleet of up to 25 cargo jets with it and Atlas Air Worldwide Holdings Inc. over the next three years.

Amazon has been looking to exercise greater control over its delivery operations, buying thousands of semitrailers earlier this month to expand its in-network shipping capacity. By using its own planes, Amazon may be able to head off the delays that FedEx, UPS, and the U.S. Postal Service have produced during the last two holiday seasons.

The company has also extended its reach into last-mile delivery with local couriers and trucks, and expanded research into drone delivery. In addition to guaranteeing the fast delivery that helps it compete with brick-and-mortar sellers, operating its own planes, trucks, and drones could produce a cost savings for Amazon—although the package services are seen as having subsidized the company’s fast growth.