A few weeks back FedEx officially announced they would be breaking ties with Amazon, opting not to renew their domestic FedEx Express partnership. This does not come as a surprise to many, as FedEx, the longtime customer/rival of Amazon, is able to focus on “serving the broader e-commerce market”.
"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"
All in all, this isn’t a huge deal for either company as FedEx’s total revenue earned from Amazon was only 1.3% in 2018, the online giant was much more reliant on UPS and USPS. With e-commerce expected to grow from 50 to 100 million packages a day in the U.S. by 2026, FedEx is banking on making that 1.3% up easily.
“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.”
In the meantime, Amazon will keep building their empire and expanding their presence in the delivery space. Recently they have been offering employees a buyout to start their own delivery businesses to ship packages to Amazon customers. This could be a deadly addition to their already impressive arsenal, which includes 40 cargo planes, a fleet of delivery trucks and vans,and a $1.5 billion air cargo hub currently in the works.
Will this departure be good for both companies? Only time will tell, we’re eager to see how it all plays out.
