Here's a follow-up on Amazon choosing CVG over STL for their aerial logistics hub. As we all know, Amazon chose to base their Prime Air cargo airline at Cincinnati/Northern Kentucky International, investing $1.5BB and creating 2,700 direct new jobs, and in the process producing 200 daily flights. CVG is very similar to STL, in that both have experienced massive dehubbing - Delta at CVG, TWA/American at STL.
Very much, STL was in the running to get this hub; we were one of the final picks for it. It could have been an incredible amount of business for us. Saint Louis had prepped for this, noting that there is expansion of Amazon facilities north of the airport (as well as the 2 new warehouses in Illinois) and the late-hour change to Amazon charging MO sales taxes right before the decision was made. The reasons we lost were frustrating as can be, as STL offered just about everything they wanted, including developable land, excess air capacity, and geographic positioning; what else were they looking for? CVG's primary advantage over STL seemed to be that they already are hosting a decent amount more cargo flights than what STL is hosting, but that seemed minimally impactful to Amazon's business model. Still, an idea came in my head which I sat on for a while, one that has been validated by subsequent articles on Amazon's stock posted today. I think I see their long-term strategy...
Perhaps the biggest competitive advantage for Amazon investing so much in Cincinnati has to do with another Cincinnati-based company: Macy's, formerly Federated Department Stores. I thought that the Amazon Prime Air hub could be a forerunner to Amazon buying Macy's, which would further its reach into brick-and-mortar shops in complement to its online distribution model. The STL Biz Journal posted an article today about this idea, linking two Seeking Alpha articles from J. Zhang, founder of Frontera Management, and Orange Peel Investments furthering the case that Amazon should buy Macy's.
Basically, I believe that their choice of CVG for their air cargo hub consciously took into consideration the potential acquisition of Macy's. That we lost the hub had less to do with the efficacies of STL versus CVG than it has to do with Macy's being HQ'd in Cincinnati. Also, if Famous-Barr had acquired Federated instead of the other way around, then STL would likely have been named the Prime Air hub.
Disclosures: I'm an investment manager with clients invested in Amazon stock, but not in Macy's. I'm also an air cargo consultant.
Very much, STL was in the running to get this hub; we were one of the final picks for it. It could have been an incredible amount of business for us. Saint Louis had prepped for this, noting that there is expansion of Amazon facilities north of the airport (as well as the 2 new warehouses in Illinois) and the late-hour change to Amazon charging MO sales taxes right before the decision was made. The reasons we lost were frustrating as can be, as STL offered just about everything they wanted, including developable land, excess air capacity, and geographic positioning; what else were they looking for? CVG's primary advantage over STL seemed to be that they already are hosting a decent amount more cargo flights than what STL is hosting, but that seemed minimally impactful to Amazon's business model. Still, an idea came in my head which I sat on for a while, one that has been validated by subsequent articles on Amazon's stock posted today. I think I see their long-term strategy...
Perhaps the biggest competitive advantage for Amazon investing so much in Cincinnati has to do with another Cincinnati-based company: Macy's, formerly Federated Department Stores. I thought that the Amazon Prime Air hub could be a forerunner to Amazon buying Macy's, which would further its reach into brick-and-mortar shops in complement to its online distribution model. The STL Biz Journal posted an article today about this idea, linking two Seeking Alpha articles from J. Zhang, founder of Frontera Management, and Orange Peel Investments furthering the case that Amazon should buy Macy's.
Basically, I believe that their choice of CVG for their air cargo hub consciously took into consideration the potential acquisition of Macy's. That we lost the hub had less to do with the efficacies of STL versus CVG than it has to do with Macy's being HQ'd in Cincinnati. Also, if Famous-Barr had acquired Federated instead of the other way around, then STL would likely have been named the Prime Air hub.
Disclosures: I'm an investment manager with clients invested in Amazon stock, but not in Macy's. I'm also an air cargo consultant.






