Amazon chooses Cincinnati for new worldwide hub
Tuesday, February 07, 2017
Online retail giant Amazon began flying its own packages last year when it started leasing cargo planes and flying them under the Prime Air brand. Now, the company has announced plans to open its largest worldwide air hub — investing $1.49 billion in a new home for its operations at Cincinnati/Northern Kentucky Airport.
This major change in the way Amazon deals with its deliveries came about last year when it sought to reduce reliance on courier companies such as FedEx and UPS by creating its own distribution arm. To date, 16 Boeing 767 aircraft are leased and operated on behalf of the company under the Prime Air name, with plans to ultimately operate 40 aircraft in the short term.
"As we considered places for the long-term home for our air hub operations, Hebron County quickly rose to the top of the list with a large, skilled workforce, centralized location with great connectivity to our nearby fulfilment locations and an excellent quality of living for employees," said Dave Clarke, Amazon's senior vice president of worldwide operations. Amazon already operates 11 fulfillment centers in Kentucky.
The news is a major boost for Cincinnati as it will see more than 2,000 new jobs at the site. The airport has been seeking to recover from the downturn in business since Delta greatly reduced its hub operation, which saw income and jobs decrease.
However, CVG is now one of America's fastest-growing cargo airports and already benefiting from a large DHL facility that has recently undergone expansion. It describes the Amazon news as "the most transformative announcement since the Delta hub" in the mid-1980s.
Amazon's new Cincinnati facility includes parking areas for up to 100 Prime Air aircraft, a 350,000-square-foot loading wing and a 3 million-square-foot center for unpacking, sorting and packing the planes. Around $5 million in incentives will be paid by CVG airport to sweeten the deal, which comes with a 50-year lease.
"We've worked hard to ensure CVG is a great place to do business, and we couldn't be more pleased that Amazon recognized those efforts with plans to build a top-in-class air cargo hub at our airport," said Candace S. McGraw, CEO of the CVG Airport. "A vibrant airport improves the economic vitality of the region and adding thousands of new jobs through establishing this hub at CVG will certainly be transformational for the local economy and local businesses."
The airport hopes to be able to offer existing operators reduced landing fees as a result of Amazon's operation, and that it will in turn attract more business to the airport, particularly through affiliated carriers and airlines offering a greater choice of destinations for business travelers.
The deal is a blow to nearby Wilmington Air Park in Ohio, which has served as a base for Amazon's leased planes to date. It was hoped the airport would become a hub for the retailer's distribution operation, but now will be vacated completely.
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