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Amazon To Build $1.5 Billion Air Cargo Hub In Kentucky, Creating Around 2,000 New Jobs (techcrunch.com)
Amazon is planning to build a $1.5 billion air cargo hub in a spot that crossed the Cincinnati and Kentucky border, according to the Wall Street Journal. When the project is completed, it will eventually result in around 2,000 total new jobs. TechCrunch reports: The new hub is designed to help provide a home for its increasingly large fleet of at least 40 cargo planes, a group of vehicles it perviously revealed it was leasing under the name of Amazon Prime Air, complete with Amazon exterior paint jobs. The planes are designed to help Amazon handle its increasing transportation needs, which are growing as its share of global retail business increases, and straining the capacities and capabilities of its shipping partners, which include FedEx and UPS. Amazon has long maintained that it's not looking to compete with other logistics providers, but it recently became an ocean cargo shipping company, with the ability to act as a "freight forwarder," services that FedEx and UPS also offer. Amazon still hopes to eventually offer services both to itself and to outside companies and retailers, which would put it in direct competition with its current partners, according to the WSJ's sources.
...straining the capacities and capabilities of its shipping partners, which include FedEx and UPS...
I'm fairly sure that both FedEx and UPS would be more than happy to build out their respective fleet if they knew that Amazon would not leave them hanging, as Amazon apparently is doing.
"will occupy a spot that crosses the Cincinnati and Kentucky border"
Odd, one's city and the other's a state. And the border between them is a river - hard to build an airport across a river.
Turns out that's wrong - they're building a facility at the Cincinnati/Northern Kentucky Airport. Since the article is just paraphrased from an original by the WSJ (paywalled), I suspect the original said something like "near Cincinnati, across the border in Kentucky", and the person paraphrasing is an idiot (Darrell Etherington).
"National Security is the chief cause of national insecurity." - Celine's First Law
"They would have to be increasing their shipping output to create 2,000 new jobs. Instead..."
Considering Amazon has double-digit revenue growth, and it's reported that they "shipped more than 1 billion items around the world for the holiday season, more than five times its sales last holiday season", it's obvious that they are increasing their shipping output, by a lot.
"National Security is the chief cause of national insecurity." - Celine's First Law
It's better than that.
Jobs are a function of what can be bought and technical progress. That is to say: for a person to purchase good or service, a variety of economic activities must occur (business management, transportation, infrastructure, manufacture, retail). These activities are the product of human labor; the technology employed by that labor determines how much is produced per labor unit and, by reciprocal, how much labor is consumed per unit.
Labor incurs wage. Wages and profits in aggregate are the complete price of a good or service--the minimum viable price is the wage-labor cost.
Being that wages are paid from revenue, revenue is obtained from spending, and spending is made out of wages, money is only a mediator for the (uneven) exchange of human labor. Because of this, the amount of money spendable in a given time frame is finite: between two points in time (say, the entire year 2015), only a fixed amount of money can and will be spent. (Unspent money goes to savings to be spent later; inflation erodes its purchasing power, while trade and technical progress further erode the labor-hours it represents but increase its purchasing power.)
Since the spendable money in a time frame is finite and wages are paid from revenue, the number of jobs available in any given time frame under given conditions (trade, technical progress, population) is finite. QED.
You don't "create jobs"; you employ people. When you employ people, you may be consuming the growth in a market (trade, technical progress, and population growth allowing more purchasing, more jobs, etc.), or you may be out-competing a competitor as said competitor's ability to employ people falls (those jobs eventually go away, yours replace them; this may happen backwards because businesses have savings, too).
It's even possible to do it backwards. If you implement protectionist policies and increase the cost of goods, fewer goods are bought, and less infrastructure is needed. The number of purchaseable goods of the sort reduces as factory worker wages increase, reducing the number of factory worker jobs created by "bringing jobs back" as well as the number of jobs in supporting infrastructure. Paying low enough wages can increase total jobs, although even paying minimum wage increases the cost of goods produced and the number of working hours every person at every income level must expend to afford the previously-imported good, making every person at every income level poorer. Paying higher wages increases that wage-hour cost even further.
The punch line here is that the labor market adjusts in a few short years, and the number of jobs sought moves toward about 5% (U3) unemployment, so you can't even affect total unemployment long-term.
We need to focus on creating wealth and stabilizing the economy, not "creating jobs". You create wealth by trade and technical progress; you stabilize the economy by making sure those things don't happen all-at-once so as to reduce the volatility in employment, as well as by having good welfare policies.
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I'm fairly sure that both FedEx and UPS would be more than happy to build out their respective fleet if they knew that Amazon would not leave them hanging, as Amazon apparently is doing.
I'm sure they would. Problem is that they necessarily have to make a profit and Amazon would rather keep that money for themselves if they can. This margin leakage is why companies sometimes find it valuable to vertically integrate. Unless the supplier can provide the service at a substantially lower cost then there is no reason to outsource the work. Most companies don't find if worthwhile to build their own delivery networks but for companies like Amazon or Walmart it can make very real fiscal sense. You need a certain minimum scale for it to be economically worthwhile but the savings can be substantial.
Honestly I'd expect Amazon to continue to vertically integrate their delivery and logistics systems as they continue to grow. It will make it harder and harder for anyone to compete with them because they can move product cheaper than anyone else. Walmart has used basically the same tactic for decades now. They invested in their logistics while their competitors ignored it until Walmart had an almost insurmountable price advantage over most of them.