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FedEx has dropped its Express contract with Amazon for domestic deliveries in the US, the company has announced.

The contract in question pertains to air transportation rather than last-mile ground delivery.

In a statement, FedEx described it as a “strategic decision” as it focuses on the broader e-commerce market.

“This decision does not impact any existing contracts between and other FedEx business units or relating to international services,” the company said.

FedEx reiterated its recent assertion that Amazon is not its largest customer, accounting for less than 1.3% of revenue in 2018. When FedEx first made this point in February, it seemed to be in response to Amazon officially describing “transportation and logistics services” as competitors for the first time.

“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 said in its statement.

“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.”

Amazon responded: “We respect FedEx’s decision and thank them for their role in serving Amazon customers over the years.”

Source: The Verge

Header image: NASA

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