FedEx Corp. FDX -2.78% said it was ending its contract to deliver Amazon.com Inc. AMZN -1.05% packages through its ground network, essentially severing ties with one of the world’s biggest shippers.
The delivery giant said Wednesday it decided not to renew the contract when it expires at the end of August. In June, FedEx said it was ending its air-shipping contract with Amazon in the U.S. but would continue to handle ground deliveries. It would still handle international shipments.
The moves are evidence of escalating tensions between the longtime partners as the e-commerce giant builds out its own delivery services, including leasing cargo planes, buying trucks and funding local delivery drivers.
“This change is consistent with our strategy to focus on the broader e-commerce market, which the recent announcements related to our FedEx Ground network have us positioned extraordinarily well to do,” FedEx said.
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FedEx’s decision will require Amazon to find a new way to handle millions of packages ahead of the critical holiday shopping season at the same time Amazon is looking to speed home deliveries.
The once-staid delivery business has been upended in recent years as consumers buy everything from toilet paper to trampolines online, causing a surge in e-commerce shipments. FedEx and rival United Parcel Service Inc. have invested billions of dollars to handle the increased volumes. FedEx recently said it would expand to seven-day home delivery.
Although Amazon ships millions of packages a day, it spreads the orders among FedEx, UPS and the U.S. Postal Service, as well as its own growing delivery operations. FedEx has said Amazon represented 1.3% of FedEx’s total revenue in 2018, or less than $1 billion.
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https://www.wsj.com/articles/fedex-to-end-u-s-ground-deliveries-for-amazon-11565182535
2019-08-07 13:23:00Z
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