Inside Logistics

FedEx Express won’t renew with Amazon

Contract expires June 30; FedEx to focus on developing other e-commerce clients


June 10, 2019
by

A FedEx Express Boeing 767.

MEMPHIS, Tennessee – FedEx will not renew its FedEx Express U.S. domestic contract with Amazon.com, Inc.

The company made the announcement, which covers domestic U.S. air services, on Friday. FedEx said in a statement that it plans to “focus on serving the broader e-commerce market.”

The decision does not affect any existing contracts between Amazon.com and other FedEx business units or relating to international services.

FedEx pointed out in the statement that Amazon is not its largest customer. The percentage of total FedEx revenue attributable to Amazon.com represented less than 1.3 percent of total FedEx revenue for the 12-month period ended December 31, 2018.

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. FedEx has already built out the network and capacity to serve thousands of retailers in the e-commerce space.

The announcement comes just weeks after Amazon revealed plans to roll out one day delivery as standard for its Prime members, and FedEx Ground announced at the end of May it would offer deliveries seven days a week.