FedEx has opted not to renew its ground-shipping contract with Amazon, according to Bloomberg News. It’s the latest move from the shipping company as it works to sever ties with the e-commerce giant, which has increasingly worked to build out its own delivery infrastructure.
FedEx’s contract with Amazon was set to expire at the end of August, and it comes just two months after FedEx announced that it wouldn’t renew Amazon’s FedEx Express contract, which the online retailer used to transport packages by air. This newly ended contract focused on FedEx’s ground deliveries that helped bridge the “last-mile” gap between Amazon’s warehouses and its customers.
The move from FedEx comes as Amazon has increasingly become a competitor for the shipping firm. FedEx has previously said that Amazon isn’t a huge customer for it: the online retailer makes up around 1.3 percent of its total revenue. A FedEx spokesperson told The Verge that “this change is consistent with our strategy to focus on the broader e-commerce market, which the recent announcements related to our FedEx Ground network have us positioned extraordinarily well to do.” Essentially, the shipping business is projected to grow in the coming years, and FedEx isn’t interested in helping Amazon.
Amazon has increasingly been doing much of the work to bridge the “last mile”
In recent years, Amazon has increasingly been doing much of the work to bridge that “last-mile” gap. It’s rented cargo planes, launched its own delivery network for Prime customers, and released new options for customers to have packages delivered directly into their homes, garages, or cars. It also recently unveiled a new drone to deliver packages directly to customers.
In a statement, Amazon said that it’s “constantly innovating to improve the carrier experience and sometimes that means reevaluating our carrier relationships. FedEx has been a great partner over the years and we appreciate all their work delivering packages to our customers.”
FedEx and UPS have also been expanding their delivery services: each announced that they would begin delivering packages seven days a week. FedEx has also begun shipping packages faster with a new program called Extra Hours. And earlier this year, it unveiled its own delivery robot, which it’s testing out in its Memphis headquarters.
Updated August 7th, 2019, 11:30AM ET: Updated to include statement from Amazon.