Amazon is growing its shipping network an absurd amount - and it's paying off
Bloomberg's Devin Leonard reports that Amazon's annual revenue in 2010 was $34 billion. As of last year, that grew to $107 billion. The number of employees has also grown tremendously from 33,700 workers in 2010 to 268,900 as of June.
Gene Munster, an internet industry analyst at Piper Jaffray, told Bloomberg that Amazon is expected to sell 7.2 billion items this year. By 2020, that number is expected to grow to 12.6 billion items.
But getting that kind of growth isn't cheap, and involves heavy investment in transportation. Amazon spent $11.5 billion on shipping last year - that's twice what the company spent two years ago.
In 2008, Amazon leased more than 20 jets from Atlas Air. In March, the company leased 20 Boeing 767s from cargo company Air Transport Services Group. The company has also acquired 4,000 truck trailers, and opened more than 28 sorting centers and 59 delivery stations.
Amazon has also dipped into actual ships. The company's subsidiary in China has obtained a license that allows Amazon to sell space on container ships traveling between Asia and the US and Europe. Deutsche Bank released a report in June predicting that Amazon will have a shipping operation that consists of self-driving trucks and drones in addition to the 767s and container ships.
In fact, some are even predicting that Amazon will turn its investment in shipping into a whole new business, challenging companies like FedEx with its logistics supply chain.
John Rossman, a former Amazon executive, told Leonard that while this won't happen in the next five years, he definitely sees it as a possibility in the next 10 to 15 years.