Credit: Shutterstock photoAmazon (AMZN) has been called a lot of things -- e-commerce giant, cloud computing leader, technology behemoth -- the list goes on and on. While it and CEO Jeff Bezos may never be accused of being Darth Vader, its latest patent is something straight out of Star Wars.
Unearthed by CB Insights, Amazon has patented a flying warehouse.
Yes, you read that right -- a flying warehouse.
In the patent, the “Airborne Fulfillment Center” (AFC) is described as “an airship that remains at high altitude.” Inside the airship are unmanned aerial vehicles (think drones) that could deliver packages from the warehouse to customers.
Once you get past the fact that this really does sound like the Death Star from Star Wars, it's actually an ingenious idea, one that could help Amazon cut down considerably on shipping costs, its biggest expense.
In the third quarter of 2016, Amazon had fulfillment costs of $4.33 billion. For the first nine months of the year, it topped $11 billion, making it Amazon's single largest expense by line item.
Amazon has been working to cut its shipping and fulfillment expenses, having expanded its own logistics fleet. It's gone from relying solely on UPS (UPS) and Fedex (FDX) to incorporating the U.S. Postal Service, to adding its own trucks and planes, and even delivery by drone, thanks to Amazon Prime Air. With an AFC, it could be another feather in a shipping cap for Amazon, as it looks to reduce costs and generate more operating cash flow to invest in still more projects.
Operating cash flow is Bezos' preferred measure for looking at Amazon over the long haul, and given the stock's 35,000% return since its IPO, it's a good bet he's right. The company said operating cash flow increased 49% to $14.6 billion for the trailing twelve months as of the third quarter of 2016.
Even though the Death Star might be a weapon of destruction for the Rebel Alliance in Star Wars, if Amazon's plans come to fruition, the flying warehouse would be less technological terror and more a force for good for investors.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
