Amazon.com, Inc. (NASDAQ:AMZN) is flying into Lakeland, Florida in a big way.
The e-tailing giant will spend more than $100 million to build a 285,000-square foot air cargo facility at Lakeland Linder International Airport, under a 20-year deal unanimously approved on May 20 by the Lakeland City Commission. The blueprint calls for Amazon to lease 47 acres to build a seven-jet cargo hangar, with an option to expand on an additional 62 acres. Amazon will pay the city about $80,000 per month, and would pay the airport 85 cents for every 1,000 pounds of landed cargo as well as a 3 cent-per- gallon fuel surcharge. The airport in turn would be expected to upgrade its landing system, improve one of its runways and add five fuel tanks.
After the initial 20-year period, Amazon has the option to renew the lease three times, each time for a 10-year cycle.
Service is expected to begin by July 2020, according to a story in The Ledger, a local newspaper which first reported the story on May 17 when the city released documents concerning the deal. It is unclear if Amazon will phase out nearby operations in Tampa, where it currently operates seven to eight flights per day. An Amazon spokeswoman confirmed the news about the Lakeland project. She did not comment on the status of the company’s Tampa operations.
Amazon opened a 1 million square foot sorting facility in Lakeland in 2014 that is down the street from the proposed complex. The company approached the city in July 2017 about the new project, said Gene Conrad, director of Linder Airport, according to The Ledger.
Nestled on Interstate 4 about halfway between Tampa and Orlando, Lakeland is home to Saddle Creek Logistics Services, a large third-party logistics provider (3PL) which works to support operations of shipper customers, and the American Logistics Aid Network, a non-profit organization that connects companies with logistics resources to groups providing relief in the aftermath of disasters. It is also the home to the Publix grocery chain and the spring training site of the Detroit Tigers Major League Baseball club.
The airport houses the National Oceanic and Atmospheric Administration’s (NOAA) “Hurricane Hunters.” The agency has a huge presence in Lakeland, according to Kevin Cook, a spokesman for the city. The airport is also home to Draken International, the largest air combat training contractor in the U.S., Cook said.
The Amazon facility is expected to come to dominate the city’s economic landscape, according to comments in The Ledger article.
Amazon is aggressively building out its U.S. air network to support delivery commitments made for its popular “Prime” service. Today, the company guarantees two-day deliveries for millions of items on its website. However, it has announced plans to migrate to a one-day delivery standard, a dramatic compression of delivery times that is likely to amplify the importance of the company’s air network.