FedEx Reduces Amazon Ties as Retailer Flexes Delivery Muscles

FedEx said it wouldn't renew its U.S. air-delivery contract with Amazon.com, paring a key customer relationship as the largest online retailer deepens its foray into freight transportation. From a report: The delivery giant will instead focus on 'serving the broader e-commerce market' with U.S. package volume from online shopping expected to double by 2026, according to a FedEx statement Friday. The Amazon contract expires at the end of this month, and doesn't cover international services or domestic operations at other units such as FedEx's ground deliveries. FedEx's surprise move signals that the No. 2 U.S. courier will bank on smaller e-commerce customers that lack Amazon's bargaining power for big volume discounts. Amazon's emergence as a logistics giant is piling pressure on FedEx and United Parcel Service for cheaper and speedier deliveries, as the e-commerce powerhouse builds its own aircraft fleet and delivery capabilities. FedEx said Amazon represented 1.3% of sales last year.

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