FedEx has elected not to renew one of its contracts with Amazon for their Express overnight and two-day service.
“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,” the company said in a Friday statement.
Of note, the decision “does not impact any existing contracts between Amazon.com and other FedEx business units or relating to international services,” according to the release.
— Carl Quintanilla (@carlquintanilla) June 7, 2019
Amazon constituted less than 1.3% of FedEx’s revenue for the 12-month period ended December 31, 2018.
In February, shares of UPS and FedEx took a hit after Amazon announced the launch of a “Shipping with Amazon” service that will entail picking up packages from businesses and shipping them to consumers, according to the Wall Street Journal, which cited unnamed sources familiar with the matter (ie AMZN’s comms department).
In the last two years, Amazon has expanded into ocean freight while building a network of its own drivers who can now deliver inside homes and leased up to 40 aircraft while establishing an air cargo hub. Meanwhile, the company has been delivering orders from its own warehouses in 37 US cities.
Unveiled at a presentation during the robotics and space conference in Las Vegas (Re:Mars), Amazon’s electric delivery drone has a range of 15 miles and can deliver packages weighing up to five pounds to customers in under 30 minutes – which accounts for 75-90% of Amazon’s consumer deliveries, according to Jeff Wilke, head of Amazon’s consumer business.