Amazon Will Build $1.5bn US Cargo Hub in Kentucky to Cut Shipping Costs

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Amazon has announced it plans to build a $1.49bn cargo hub in Cincinnati/Northern Kentucky Airport in Hebron, US, to cut its shipping costs.

The online retail company, Amazon, has announced it will be branching out yet again, to build an air cargo hub in Cincinnati/Northern Kentucky Airport in Hebron, US in order to support its “growing fleet of airplanes”, and to cut its shipping costs.

The Expansion

The company will be creating over 2,000 new jobs upon the opening of the hub, which will reportedly cost around $1.5bn to complete.

Last year, Amazon signed agreements to lease 40 Prime Air cargo planes, with 16 currently in service for Amazon customers.

Amazon currently relies on over 30 carriers, including delivery giants such as United Parcel Services and FedEx to transport packages to its customers. By opening its own cargo hub, Amazon will be beginning to take control of the entire shipping process to its customers.

According to Steve Banker, vice-president of supply chain services at the consulting company ARC Advisory Group, this is another sign of Amazon “ramping up its business.”

“Amazon still loses money on deliveries, the IT service side of their business supports the retail operations. Owning the whole chain cuts out the middleman fees,” he said.

Comments on the Expansion

Matt Bevin, governor of Kentucky has described Amazon’s plans as “exciting.”

“Kentucky’s ideal location, proven workforce and an already extensive shipping and logistics industry have been the backbone of our relationship with Amazon for nearly 20 years.

“This new project will pay dividends to both the company and our state and we are truly grateful for the jobs and economic impact it will bring.”

The airport’s chief executive, Candace McGraw, described the hub as ‘transformational” for the economy and for businesses in the area.

Just last month, Amazon announced it will be creating 100,000 new, full-time jobs in the US by the middle of 2018.

It also announced its plans to open new Warehouses in Texas, Maryland.