Company sees better opportunities in wider ecommerce market
FedEx has made the strategic decision to not renew the FedEx Express US domestic contract with Amazon.com, Inc.
The company plans to “focus on serving the broader e-commerce market.”
According to a FedEx statement the decision does not impact any existing contracts between Amazon.com and other FedEx business units or relating to international services.
FedEx will retain some Amazon business because the decision doesn’t affect existing contracts involving the courier’s other divisions such as its ground operation. International services too will remain unaffected.
Amazon.com is not FedEx’s largest customer. The percentage of total FedEx revenue attributable to Amazon.com represented less than 1.3% of total FedEx revenue for the 12-month period ended December 31, 2018.
FedEx sees a “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 company said it was “excited about the future of e-commerce and our role as a leader in it.”