1. What costs would be relevant when Amazon considers whether to operate its own cargo freight service?
Original blog posting (January 7, 2016)

2. Amazon
Since inception, Amazon has relied on third-party shippers, such as UPS and FedEx
In 2013, bad weather and last minute orders led to many Amazon packages not being delivered in time for Christmas
Additionally, shipping costs are a large expense and are increasing
Amazon is now rumored to be experimenting with operating its own air cargo operation

3. Question 1
What costs are relevant when Amazon is considering whether to start its own cargo freight service?

4. Question 2
Would the expenditures related to Amazon’s freight service be capitalized or expensed by Amazon?

5. Question 3
What tools might Amazon use to analyze the decision to operate its own cargo freight service?

6. Question Recap
What costs are relevant when Amazon is considering whether to start its own cargo freight service?
Would the expenditures related to Amazon’s freight service be capitalized or expensed by Amazon?
What tools might Amazon use to analyze the decision to operate its own cargo freight service?

7. For additional news stories to use in the accounting classroom, see the Accounting in the Headlines blog at Questions or comments? Contact Dr. Wendy Tietz at