FedEx Ends Amazon’s FedEx Express Plane Service

FedEx to end Amazon contract for Fed Ex Express plane service

FedEx Express ditches Amazon

Amid increasing competition, global courier company FedEx has decided not to renew its air shipping contract with e-commerce giant Amazon.

FedEx pointed to "significant demand and opportunity for growth in e-commerce" and emphasized that 1.3% of FedEx's total revenue comes from Amazon.

It's "a strategic decision" that will let FedEx focus on thousands of other retailers including Target, Walgreens and Walmart, company spokeswoman Katie Wassmer. According to FedEx's statement, Amazon accounted for less than 1.3% of FedEx's revenue in 2018.

FedEx is ditching Amazon in a meaningful way.

FedEx says it is still focused on e-commerce delivery and will focus on "serving the broader e-commerce market".

"Although (FedEx Express) represents a relatively small amount of the total Amazon spend, FedEx and UPS are the only carriers that can effectively move some of the next-day and two-day shipments", Anderson said.

FedEx Corp. said it wouldn't renew its USA air-delivery contract with Inc., as the courier focuses on "serving the broader e-commerce market".

Amazon has been testing a new online service that matches truck drivers with shippers since a year ago. Shipping consultant Satish Jindel estimated that FedEx's domestic air-parcel business with Amazon is probably "a few hundred million a year, at the best", and poised to decline.

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It has always been speculated that Amazon's growing delivery and shipping operations could take market share from companies such as FedEx and UPS.

"They know their Amazon business is going to continue to shrink", said Jindel, founder of SJ Consulting Group, referring to FedEx. emerging as a potentially formidable challenger to FedEx Corp. and United Parcel Service Inc.

While noting that Amazon relies more heavily on UPS and USPS than on FedEx, the Post said, the lack of an air contract with FedEx could hurt Amazon during the holidays "if it sees a flood in last-minute orders and needs extra capacity".

Amazon has been beefing up its own freight-hauling ability for several years.

Amazon has notably been expanding its fleet of planes among other work that paves the way for its own major launch in the delivery business.

The shares rose 1% to $158.48 at 3 NY.

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