Freight Cargojet announces agreement with Amazon
- Cargo Jet
Canada´s Cargojet has announced that it has entered a new strategic agreement with Amazon. The cargo carrier is a key partner for Amazon in Canada.
The agreement sealed between Cargojet and Amazon is a strategic one and sees the air cargo carrier providing air-transportation services for Amazon. Overnight air cargo services and charters could lead to a growth in Amazon´s utilization of those services.
With the latest agreement, both carriers hope to improve the overall delivery speed for Amazon customers in Canada. Additionally, Cargojet will issue warrants to Amazon to purchase variable voting shares that will best based on the achievement of commercial milestones in relation to Amazon´s business with Cargojet, the carrier stated in a publication.
"Cargojet’s entrepreneurial culture, combined with our core values of strong customer focus, have enabled Cargojet’s customers to deliver and fulfil on their e-Commerce promises. This agreement will support Cargojet further solidify its vision and strong leadership in the air cargo industry," said Chairman of the Board James R. Crane.
"The commercial relationship the Cargojet team continues to build with Amazon has now allowed us to further strengthen and align our long-term strategic commercial interests. Our continuous commitment to provide value added services enables us to earn all of our customers’ trust as the leading overnight air-network operator," added Chief Executive Officer Ajay Virmani.
"Cargojet has been a key player in our Canadian middle mile operations for several years," said Adam Baker, Vice President Global Transportation, Amazon. "We’re thrilled to build a longer-term relationship that will allow us to provide even faster service to Amazon customers in Canada."
The partnership between Cargojet and Amazon will see more packages being moved from the Amazon facilities to other Amazon or last miles carrier locations. Speed an reliability is key of an logistics network and Amazon hopes to establish good delivery performances throughout the year.
In the statement, Cargojet added: "As part of the agreement, Cargojet will issue the warrants to Amazon in two tranches. The first tranche of warrants allows Amazon to acquire up to 9.9 percent of Cargojet’s variable voting shares at an exercise price of $91.78 per share, comprising the 30-day volume weighted average trading price ("VWAP") immediately prior to the date of the agreement. The first tranche of warrants will vest over a period of six and a half years, with vesting tied to the delivery by Amazon of up to C$400 million in business volumes during the same term."
Cargojet is a leading provider for air cargo services from Canada. It carries over 8,000,000 pounds of cargo weekly with an aircraft fleet of 26 airframes. Cargojet flies to 15 major cities and international destinations.
Source © cargojet.com