Amazon Building Pipelines to Deliver Packages Direct to Living Room
Online retail store Amazon has unveiled plans for a new delivery service that uses pipelines to carry packages directly to consumers across the United States Unveiled at this year's Consumer Electronic Show (CES), the service -- dubbedÂ  âTÃ¼b Primeâ -- combines a system of pneumatic tubes with experimental magnetic levitation technology to float boxes thousands of miles in a matter of minutes. The e-commerce behemoth began its plans on its ambitious series of tubes after being denied permission by the Federal Aviation Administration (FAA) to use flying drones to deliver products. TheÂ TÃ¼b Prime central hub in St. Louis has already been completed as the company begins building the delivery pneumatic tubes from coast to coast. Smaller TÃ¼b lines will branch off and is similar to laying down new internet cable or telephone lines. Substations will be placed en route to ensure the tubes function properly. The estimated cost of the entire pipeline system is $894 billion, which CFO Thomas Szktuak says will be financed by a highly dilutive rights issue and the largest corporate bond offering in history. âYou gotta spend money to make money,â he told Bloomberg this morning. âIt may seem foolish to spend close to a trillion dollars on an unproven technology without a demonstrable market. But Iâm sure our shareholders will understand theÂ long-term vision. âPeople laughed at the idea of the flying car and shopping malls on the moon. But look where we are now.â âAmazon prides itself on looking forward,â Amazon CEO Jeff Bezos told the crowd at CES. âWe donât mind the initially loss of constructing the expansive tube because of the revenue the delivery pipeline will bring in over the coming years. Itâs the next great engineering feat and who better to do it than Amazon.â The Amazon TÃ¼b will be included in a standard Amazon Prime subscription. The company believes it will eventually save money by eliminating fees to traditional delivery services such as UPS and FedEx. In the long run, construction costs will be offset by delivery fees. âYouâll be able to track your package mid-tube,â said Bezos, âand one day, an Amazon Tube will go to everyoneâs house. Drones aren't the future; pneumatic tubes are.â According to Bezos, the American Tub Prime pipeline is just the beginning. Amazonâs next ambition is to Asia. NamedÂ âTÃ¼b Fire,â construction to Asia will be completed by 2021 and will serve to eliminate ocean freight cost. With Chinese online marketplace, Alibaba, on Amazonâs tail, growth in Asia is a top priority for the $140 billion company. Amazon is also developing technology to de-materialize and re-materialize products, but âthatâs a few years down the pipeline,â said Bezos.