FedEx has decided not to renew its US domestic contract with Amazon.com, saying it wants to focus on the broader e-commerce market.
Amazon represents just under 1.3 per cent of total FedEx revenue. In 2018, FedEx Express’s US domestic package revenue was $12.8 billion. Total group revenue was $65.5 billion.
The move comes at a time when Amazon is expanding its logistics operations. It has just launched a scheme offering workers in the US a $10,000 incentive to leave and set up their own delivery company delivering parcels for Amazon.
In a statement, FedEx said its decision would not affect any existing contracts between Amazon.com and other FedEx business units or relating to international services.
“As previously disclosed, Amazon.com is not FedEx’s largest customer. The percentage of total FedEx revenue attributable to Amazon.com represented less than 1.3 per cent of total FedEx revenue for the 12-month period ended December 31, 2018.”
And, said FedEx: “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. We are excited about the future of e-commerce and our role as a leader in it.”