Amzon scales back cargo flying as demand cools

The e-commerce giant, Amazon is scaling back on flights this year, citing lower demand and slower economic growth.
Air Transport Services Group, which runs a significant portion of Amazon’s air cargo fleet, said it expects to operate Boeing 767 freighters dedicated to servicing Amazon and DHL at reduced schedules and less flight time per aircraft. “Both companies are adjusting their ground and air distribution and fulfillment networks in the United States to conform to reduced U.S. economic growth and consumer spending levels in the first half of 2023,” ATSG said. Air cargo rates, which surged in recent years due to port congestion and high demand for fast deliveries, have slumped. The Baltic Air Freight Index was down more than 33% on Jan. 30 from a year earlier. The International Air Transport Association said last month that air cargo demand in November was down nearly 14% from the year-ago period, while capacity fell 1.9%. Meanwhile, passenger airlines have said travel demand has held up as consumers prioritize trips and other experiences. But coming off Amazon’s weakest year for growth in its quarter century as a public company, CEO Andy Jassy has taken steps to curtail expenses. That includes cutting more than 18,000 jobs, pausing warehouse expansion and shuttering some projects.