E-commerce industry leader Amazon.com Inc. broke ground Tuesday on a massive, $1.5 billion expansion of its air cargo hub at the Cincinnati/Northern Kentucky Airport, saying the facility would open in 2021 with a mission to drive the company's trademark offer of "fast, free shipping," as the e-tailer continues to add new services and territories.
First announced in 2017, the move is set to expand Seattle-based Amazon's capacity to handle growing amounts of express freight as the company is keeping its foot on the accelerator for its ambitious plans to offer fast fulfillment services to a growing number of both customers and suppliers.
Last month, Amazon announced it had begun upgrading the nationwide delivery terms of its Amazon Prime subscription service from two-day shipping to next-day shipping. The company said during its quarterly earnings call that the process would require a year to roll out and would require an $800 million investment in its supply chain and logistics capabilities.
Within weeks, rival retailer Walmart Inc. countered with its own initiative to provide free, next-day shipping on orders of $35 and above. But Amazon continued expanding its services in May, making its blockchain network available to the public and then expanding the metropolitan areas covered by its home delivery service for groceries from Whole Foods Market, the supermarket chain Amazon acquired in 2017 for $13.7 billion.
Expanding its air hub at the Cincinnati/Northern Kentucky Airport, which is known by its airline-industry initials CVG and is located in Hebron, Ky., could help Amazon sustain that breathless growth by providing a hub for its growing fleet of freighter aircraft and supporting the addition of third party sellers to its "Fulfillment by Amazon" service.
"Our new Amazon Air hub, opening in 2021, is part of our continued investment in Prime to ensure we have the capacity required for continued outstanding service for our customers," Sarah Rhoads, the director of Amazon Air, said in a release. "We're proud to call Kentucky home for our air hub, creating more than 2,000 jobs in this fantastic community."
In a social media post about the groundbreaking ceremony, Dave Clark, Amazon's senior vice president for worldwide operations, shared more details about the specifications of the new facility. "We're investing $1.5 [billion] in our new air hub to get you your packages faster," Clark posted on Twitter. "This thing will be an action packed [three million square feet] of high speed package sortation getting nationwide selection from our [fulfillment centers] to customers even faster."
