The Amazon contract “we believe was a low-margin business.” “This move is a logical progression after letting its Express contract expire in June,” Klaskow said. ‘Near-term pain’īy walking away from Amazon, FedEx is looking to increase its profit margins, even though the company could feel “some near-term pain,” Lee Klaskow, an analyst with Bloomberg Intelligence in a Wednesday note. FedEx is even testing a ground-delivery robot. The Memphis, Tennessee-based company has also signed up more drop-off and pick-up points, including with Dollar General Corp. Postal Service and invest to handle oversized packages. To scoop up more e-commerce business, FedEx announced in May that its ground unit would begin seven-day service in January, deliver more packages that had been handed off to the U.S. Amazon fell less than 1% to $1,779.45.Īmazon made up about 1.3% of FedEx’s sales last year.
“FedEx has been a great partner over the years and we appreciate all their work delivering packages to our customers.”įedEx dropped 2.1% to $157.80 at 11:08 a.m. “We are constantly innovating to improve the carrier experience and sometimes that means reevaluating our carrier relationships,” Amazon said in an email Wednesday. Amazon is also starting a home-delivery service modeled after the contractor-based ground unit at FedEx, which flagged the competitive risk in its latest annual report to U.S. The courier will still have a contract with Amazon for international deliveries.įedEx is reducing its dependence on Amazon as the online retailer builds out a logistics network with hundreds of fulfillment centers and adds next-day air capacity with leased jets. Recent moves to bolster service “have us positioned extraordinarily well” to handle demand, it said.
“This change is consistent with our strategy to focus on the broader e-commerce market,” FedEx said in the statement. The decision quickens the company’s retreat from the largest online retailer just two months after FedEx said its Express unit wouldn’t extend an agreement to fly Amazon’s packages in the U.S. The ground-delivery contract with Amazon won’t be renewed when it expires at the end of this month, FedEx said in a statement. as the e-commerce giant emerges as a competitor by building its own shipping network.
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