Amazon is once again having problems with its workforce. Previously it was German warehouse staff, now it is US pilots.
On Tuesday (06 December 2016) a restraining order was placed by a US court on the pilots of Air Transport Services Group Inc and its subsidiary ABX Air preventing them taking industrial action. The pilots were planning to stage a strike on Tuesday and Wednesday (7-8 November 2016). Previous ‘wild cat’ action taken by the ABX pilots on the 22 November forced the cancellation of 75 flights. DHL Express has also been affected by the strikes.
The pilots are members of the ‘Airline Professionals Association’, which in turn is part of the Teamsters Union. Their complaint is that ABX aircrew are understaffed and that the pilots are obliged to work overtime to cover the shortage.
Reports suggest that pilots at fellow Amazon air freight provider Atlas Air also feel that their flight operations are understaffed. The same sources suggest that these third party air freight suppliers have pay and conditions that compare badly with those received by pilots at FedEx and UPS and this is angering flight crews.
This is potentially a serious issue for Amazon. The fleet of ABX alone is roughly 50 aircraft and removing these from the e-retailers network would be a significant problem in the weeks leading up to Christmas.
The implication is that is that if the strikes proceed Amazon will be thrown back on having to rely on FedEx and UPS for additional capacity in the US domestic market. Whilst Amazon is one of the two Express carrier’s largest customer the contracts with ABX and Atlas were designed to reduce reliance on them. Atlas and ABX are a core part of the ‘Prime Air’ capability that is central to Amazon’s marketing strategy. The possibility may be that Amazon will be facing both a significant service deterioration in terms of its ability to deliver products on time as well as a large increase in costs as it is forced to compete for scarce capacity on FedEx and UPS aircraft in the busy Christmas period.
Source: Transport Intelligence, 08 December 2016
Author: Thomas Cullen