FedEx dumps Amazon after online retailer ramped up its own delivery service
- Amazon added its smile logo to trucks and planes to handle more of its own deliveries and depend less on FedEx and other shipping companies
- FedEx responded by ending its relationship with Amazon to focus on the retailer’s competitors, who expect to grow their online business
- Traditional retailers like Walmart and Target are expected to benefit from the move, allowing FedEx to distance itself from Amazon
- Amazon executive Dave Clark, who oversees the company’s warehouses and delivery business, wishes FedEx, ‘nothing but the best’
FedEx is splitting with Amazon and showing more love to the online retailer’s competitors.
The shipping company announced Wednesday that it will no longer handle ground deliveries for Amazon, after the online retailer started beefing up its own, in-house delivery system.
‘Nothing but respect for FedEx but they were very small piece of our network and vice versa, we wish them nothing but the best (conscious uncoupling at its finest),’ Amazon executive Dave Clark, who oversees the company’s warehouses and delivery business said in a post on Twitter on Wednesday.
‘We have great strategic partners who are part of our long term plan and we appreciate what they do for customers.’
FedEx on Wednesday said it will no longer provide ground delivery services for Amazon, after the online retailer began beefing up its own, in-house delivery system (stock image)
Amazon has slapped its smile logo on trucks and planes to deliver goods directly to customers. The move poses a threat to delivery firms like FedEx and UPS, which have worked alongside the US Postal Service to speedily get Amazon’s goods out to customers (stock image)
‘This does not come as a surprise to us,’ Citi Research analyst Christian Wetherbee said in a note to clients. ‘The company is clearly trying to move away from its partnership with Amazon and we believe it is using this move as a selling point to win new non-Amazon business.’
Traditional retailers like Walmart and Target want to sell more of their goods online, which in turn will allow FedEx to distance itself from Amazon without suffering the same competitive damage it might once have.
Amazon has been slapping its smile logo on trucks and planes to deliver goods directly to customers. It even has experimented using robot drones to get packages delivered faster.
The move poses a threat to delivery firms like UPS and previously FedEx, which have worked alongside the US Postal Service to speedily get Amazon’s goods out to its customers.
FedEx, which already had ended its air delivery contract with Amazon, in June downplayed its dependence on the retailer in a released statement.
‘Amazon.com is not FedEx’s largest customer,’ wrote the shipping company, noting Amazon represented less than 1.3 percent of total FedEx revenue for the 12-month period ended December 31, 2018.
‘I mean, we look at Amazon as a wonderful company and service, and they’re a good customer of ours,’ said FedEx Chairman and CEO Fred Smith during an earnings call in December. ‘We don’t see them as a peer competitor at this point in time. For many reasons, we think it is doubtful that that will be the case.’
However, FedEx showed it was becoming concerned last month, warning for the first time in a government filing that Amazon’s fledgling delivery business could lower prices, hurt its revenue and ‘negatively impact our financial condition and results of operations.’
‘Nothing but respect for FedEx but they were very small piece of our network and vice versa, we wish them nothing but the best (conscious uncoupling at its finest),’ Amazon executive Dave Clark, who oversees retailer’s warehouses and delivery business said in a post on Twitter
It’s unclear how much the shipping company’s exit will impact Amazon, since the retailer doesn’t release figures on how many packages are delivered by shipping companies.
Amazon executives publicly said the online retailer would survive without FedEx with the help of other shipping companies.