- General
- June 8, 2019
- 4 minutes read
FedEx Ends Delivery Contract With Amazon
image: FedEx FedEx has announced that it’s not renewing a FedEx Express contract with Amazon, as it focuses on “serving…
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| image: FedEx |
FedEx has announced that it’s not renewing a FedEx Express contract with Amazon, as it focuses on “serving the broader e-commerce market”. FedEx termed the decision as “strategic”, even as revenue from Amazon’s contract accounted for 1.3% of FedEx’s total revenue last year. The contract will terminate on the last day of this month (June 30).
The non-renewal signals increasing competition, both in the e-commerce sector and also between FedEx and Amazon. Both companies have begun to compete in several areas. For example, Amazon unveiled a delivery robot in January with FedEx following suit the next month. Amazon also recently unveiled a delivery drone that it says will start making deliveries “within months”.
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| image: FedEx |
E-commerce is expected to grow to 100 million packages delivered daily compared to 50 million now by 2026. FedEx says it has built out the network and capacity to make deliveries for thousands of e-commerce retailers. Although Amazon still leads with 49% market share in the US, competition is booming from other retailers like Walmart, eBay, Best Buy, QVC, Wayfair, Macy’s, The Home Depot and more.
FedEx is only terminating contracts related to air transportation with Amazon. Other contracts between both companies remain intact. The termination comes on the heels of Chinese telecom giant Huawei accusing FedEx of diverting two of its parcels destined for locations in Asia to the U.S.
