FedEx to end relationship with Amazon

FedEx won't renew ground delivery contract with Amazon

As FedEx itself is so quick to point out, Amazon accounts for only about 1.3% of its revenue. It owns Whole Foods, the high-end grocery chain, and just got involved in homebuying.

FedEx and Amazon are parting ways. "FedEx has been a great partner over the years and we appreciate all their work delivering packages to our customers", they said.

I am highly skeptical that, with Amazon as a competitor, Walmart Inc., Target Corp. or anyone else is going to be that much easier of a customer when it comes to pushing for lower pricing and faster delivery times.

In a regulatory filing in February, Amazon tweaked the description of its business to say that competitors include transportation companies so FedEx "is taking them at their word and dropping them as a client", Becker said.

"FedEx has made the decision that is no longer wants to sharpen its executioner's sword", said Scott Galloway, a professor at New York University's Stern School of Business.

Over the past couple of years, Amazon's moves are often met in lock step by FedEx: Amazon expanded its warehouse center, and FedEx debuted FedEx Fulfillment. The company also has to contend with the risk of pilot shortages and strikes at the third-party carriers it relies on to support its burgeoning air-cargo operations. In four years, the company could have as many as 200 aircraft, according to the financial firm Cowen.

Amazon, meanwhile, is hoping to do the same thing for logistics that it did with cloud computing and web-hosting services.

FedEx will end another delivery service with Amazon.

FedEx signalled the sea change in June, when it announced it would not renew its deal to fly Amazon's deliveries through its Express unit in the United States. Recent moves to bolster service "have us positioned extraordinarily well" to handle demand, it said.

"We are constantly innovating to improve the carrier experience and sometimes that means reevaluating our carrier relationships", an Amazon spokesperson wrote in a statement.

FedEx can't give up on the e-commerce game entirely, though.

Amazon was responsible for just over 1% of FedEx's sales in 2018.

Despite Amazon's investment in a new shipping network, Goldman Sachs analysts estimate it could cost an additional $122 billion to catch up to industry leaders FedEx and UPS.

Amazon has been rapidly scaling up its logistics infrastructure in a way similar to its web-hosting unit. Its aggressive plans to expand its internal shipping network threaten FedEx and UPS.

FedEx Ground CFO Bob Henning on the company's plans for the busy holiday season and the potential competition in shipping from Amazon. "We don't see them as a peer competitor at this point in time". "It is creating bad blood".

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