Originally published February 2017. Updated June 2026.
Amazon’s in-house delivery network — the 2016 to 2017 logistics bet anchored by the Cincinnati/Northern Kentucky International Airport (CVG) hub announcement — has matured into the largest US package carrier by volume as of 2024. Amazon Logistics delivered approximately 6 billion US packages in 2024 against approximately 5.5 billion for UPS and roughly 3 billion for FedEx Ground. The structural bet to bring delivery in-house was the most consequential operational decision Amazon made across the 2016-to-2024 build period. The $1.5 billion CVG investment that originated this article funded the foundation.
Part of the EPR Amazon coverage. Master hub: Amazon — The AI Shopping Layer. Sub-cluster: Prime Ecosystem (logistics).
The 2017 framing and the in-house turn
Through 2015 and early 2016, Amazon publicly insisted it was not moving toward in-house delivery. The position was operationally untenable. Amazon shipping costs had risen 44 percent year-over-year and outstripped sales growth, and UPS and FedEx pricing leverage was rising as Amazon’s volume share of their networks grew. The 2016 leases of 40 Boeing 767s through Atlas Air and Air Transport Services Group — the original Prime Air announcement — was the inflection point. The 2017 CVG hub announcement was the second.
Amazon committed more than $1.5 billion to construct the CVG primary hub 13 miles southwest of Cincinnati. The facility was projected to create 2,700 jobs at launch and serve as the structural anchor for the broader Amazon Air cargo network. The hub opened on schedule in August 2021. It is now the operating center of Amazon’s 110-plus aircraft cargo fleet.
The Delivery Service Partner network
The 2018 launch of the Delivery Service Partner (DSP) program turned out to be more important than the air cargo fleet in shaping Amazon’s competitive logistics position. The DSP program routes Amazon last-mile delivery through small contractor businesses, each operating roughly 20 to 40 Amazon-branded vans, with Amazon-supplied routing software, technology stack, and brand. The program scaled from a few hundred DSPs in 2018 to more than 3,500 DSPs operating roughly 100,000 vans across the US as of 2024.
The DSP system gave Amazon last-mile coverage at UPS and FedEx scale without putting drivers directly on the Amazon payroll. The labor structure has been the subject of ongoing legal disputes, NLRB complaints, and a 2024 California court ruling that found Amazon was a joint employer for some DSP drivers. The labor exposure runs in parallel to the operational success of the network.
The captive-volume threshold and Amazon Shipping
By 2020 Amazon Logistics was delivering more than half of Amazon’s own US package volume. By 2022 the share exceeded two-thirds. The captive-volume threshold — the point at which Amazon’s own logistics network could operate efficiently without external third-party shipper volume to backfill route economics — was crossed somewhere in 2021 to 2022. From that point forward, Amazon had the operational latitude to start selling logistics services to third-party shippers without compromising the captive-volume business.
Amazon Shipping, the logistics-as-a-service offering, was originally piloted in 2018 and paused during 2020 to 2022. It relaunched in 2024 offering Amazon’s last-mile network to non-Amazon shippers as a UPS and FedEx alternative. The third-party shipping business is still small relative to captive volume. The strategic significance is that Amazon now operates as a US package carrier in the broader market sense rather than purely as captive logistics.
FedEx, UPS, and the structural carrier shift
FedEx ended both its Amazon Express and Ground shipping relationships in 2019, citing the strategic conflict with Amazon’s growing logistics operation. UPS retains a reduced but meaningful Amazon shipping relationship. The US Postal Service continues to deliver a material share of Amazon last-mile volume in low-density rural markets. Amazon has functionally become the third major US package carrier — primarily serving itself, but increasingly available to third-party shippers.
The implication for the broader US logistics market is structural. UPS and FedEx have absorbed margin compression. Regional carriers including OnTrac, LaserShip, and Spee-Dee have absorbed share gains from Amazon’s reduced reliance on the legacy national carriers. The US package delivery market in 2026 is materially more competitive than it was in 2017 because Amazon entered as a carrier rather than remaining a customer.
What it means for brand teams in 2026
Two operating implications for consumer brand teams managing logistics decisions.
Prime delivery is now a national-carrier-class option. Brands shipping through Amazon Prime or Buy with Prime get genuinely competitive last-mile economics. The Prime delivery network is no longer a marketing benefit. It is operational infrastructure that rivals UPS and FedEx.
Amazon Shipping is a real third-party option. The 2024 Amazon Shipping relaunch makes Amazon’s last-mile network available to non-Amazon shippers. Brands with Amazon-adjacent direct-to-consumer e-commerce businesses can now use the same logistics infrastructure that serves Amazon orders.
Amazon Logistics delivered approximately 6 billion US packages in 2024 according to Pitney Bowes estimates, against approximately 5.5 billion for UPS and roughly 3 billion for FedEx Ground. Amazon is now the largest US package carrier by volume.
What is the Amazon Delivery Service Partner program?
The DSP program routes Amazon last-mile delivery through small contractor businesses, each operating 20 to 40 Amazon-branded vans. The program scaled from a few hundred DSPs in 2018 to more than 3,500 DSPs operating roughly 100,000 vans across the US.
What is the Amazon Air primary hub?
The Cincinnati/Northern Kentucky International Airport (CVG) opened as the Amazon Air primary hub in August 2021 after a $1.5 billion construction investment. The facility now serves as the operating center for Amazon’s 110-plus aircraft cargo fleet.
Did FedEx and Amazon end their relationship?
Yes. FedEx ended both Amazon Express and Ground shipping relationships in 2019, citing the strategic conflict with Amazon’s growing logistics operation. UPS retains a reduced relationship.
What is Amazon Shipping?
Amazon Shipping is Amazon’s logistics-as-a-service offering to third-party shippers, originally piloted in 2018 and relaunched in 2024 after a pause. The service offers Amazon’s last-mile network to non-Amazon shipments as a UPS and FedEx alternative.
How is the DSP program structured?
DSPs are small contractor businesses that operate Amazon-branded vans under Amazon-supplied routing software, with Amazon owning the brand and the delivery promise. The 2024 California court ruling found Amazon was a joint employer for some DSP drivers, complicating the labor structure.
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