FedEx announces change in Amazon relationship, says it’s not renewing Express US domestic contract
FedEx revealed a change in its relationship with Amazon on Friday, announcing that the company will not be renewing its Express U.S. domestic contract with the online retail giant.
The delivery company will be directing its “focus on serving the broader e-commerce market,” FedEx said in a statement.
The company pointed out that there’s an anticipated growth for e-commerce in the coming years, saying the daily number of packages in the U.S. is anticipated to rise substantially.
“There is significant demand and opportunity for growth in e-commerce which is expected to grow from 50 million to 100 million packages a day in the U.S. by 2026,” the company said. “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.”
FedEx’s decision to part ways with Amazon in this capacity will not have an effect on international service, it said. It will also not affect “any existing contracts between Amazon.com and other FedEx business units.”
The contract, which is for air shipment of packages for Amazon in the U.S., is set to expire on June 30, according to The Associated Press.
The company also noted that Amazon isn’t their “largest customer” saying that during 2018, less than 1.3 percent of FedEx’s all-in profits came from them.
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In a statement obtained by The Associated Press, Amazon said only that it respected FedEx's decision and thanked the delivery company for serving Amazon customers over the years.
The Associated Press contributed to this report.