FedEx won’t renew Amazon ground-delivery contract

MEMPHIS/SEATTLE (UPI) — FedEx said Wednesday that it will not be renewing its ground-delivery contract with Amazon after it expires in August.

“This change is consistent with our strategy to focus on the broader e-commerce market,” FedEx said in an emailed statement to Business Insider.

The courier company has been working to increase its delivery network through e-commerce and the company said it is “extraordinarily” well-positioned to shift its focus.

The announcement comes two months after FedEx said it had decided to allow its express delivery contract with Amazon to also expire, stating that the decision to do so was strategic in order to concentrate “on serving the broader e-commerce market.”

Since 2015, Amazon has been creating a network that includes drones and autonomous delivery devices while expanding its warehouse center and testing its own delivery service in order to bolster its internal delivery system to save money.

FedEx has suggested Amazon might be a growing threat, stating in its 2018 annual report that if “current customers, such as, become competitors and bundle transportation with other services, it will reduce our revenue and could negatively impact our financial condition and results of operation.”

In a statement Wednesday, Amazon said FedEx has been a “great partner” and it appreciates their relationship.

“We are constantly innovating to improve the carrier experience and sometimes that means reevaluating our carrier relationships,” an Amazon spokesman said in a statement.

Reporting by Darryl Coote

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