June 08, 2019
On Friday, FedEx announced that it will no longer work with Amazon on domestic express deliveries within the U.S.
“FedEx has made the strategic decision to not renew the FedEx Express US domestic contract with Amazon.com, Inc., as we focus on serving the broader e-commerce market,” read a company statement. “This decision does not impact any existing contracts between Amazon.com and other FedEx business units or relating to international services.”
“There is significant demand and opportunity for growth in e-commerce which is expected to grow from 50 million to 100 million packages a day in the U.S. by 2026. FedEx has already built out the network and capacity to serve thousands of retailers in the e-commerce space. We are excited about the future of e-commerce and our role as a leader in it.”
The company revealed that revenue earned from working with Amazon only amounted to less than 1.3% in 2018.
This move by FedEx follows reports of Amazon forming their own delivery fleet as well as offering up to $10,000 in investments for workers to quit their jobs with Amazon and form delivery companies that could help deliver packages for the online giant. Amazon CEO Jeff Bezos had mentioned this “Pay to Quit” program five years ago in a shareholder letter.
With Amazon’s burgeoning shipping network now seeming to take hold, FedEx executives have tried to downplay Amazon’s threat to their business.
– MK. II