FedEx Ending Ground Deliveries for Amazon
FedEx will not be renewing its ground-delivery contract with Amazon.com, which expires at the end of this month, CNBC reported. A spokesperson for FedEx said the decision is consistent with the company's strategy to focus on the broader e-commerce market.
“We're constantly innovating to improve the carrier experience and sometimes that means re-evaluating our carrier relationships,” CNBC reported an Amazon spokesperson said. “FedEx has been a great partner over the years and we appreciate all their work delivering packages to our customers.”
Back in June, FedEx announced that it was ending its Express U.S. shipping contract with Amazon. At the time, FedEx explained Amazon accounted for less than 1.3 percent of its total revenue in 2018. FedEx still maintains shipping partnerships with big names like Walmart and Walgreens. Meanwhile, Amazon has continued to increase its own delivery network, announcing its Delivery Service Partners program in June and debuting delivery drones.
Total Retail's Take: This decision from FedEx gets Amazon one step closer to being a self-sufficient mechanism that can get products from suppliers to customers, all in-house, since it's already the largest shipper of its own products. The news is also significant because at a time when most companies feel they "need" to be partnering with Amazon in order to survive, FedEx is one of the first to change that narrative. “Apple, for instance, recently started selling its products on Amazon again after a several year spat with the e-commerce giant, but Apple doesn’t really need Amazon," Jon Reily, vice president of global commerce strategy lead at Publicis Sapient, said to Total Retail. "I wonder if a move like this will lend courage to other companies to take the same steps that FedEx has."
Related story: FedEx Ground to Offer 7-Day-a-Week Deliveries