FedEx declines to renew U.S. Express contract with Amazon, a move that could affect the retailer dur

[Eugene]

Source: Washington Post

FedEx declines to renew U.S. Express contract with Amazon, a move that could affect the retailer during holiday shipping season

The shipping giant’s decision reflects long-simmering tension with the online retailer, which has its own logistics operation that’s taken the most lucrative delivery routes for itself.

By Jay Greene June 7 at 2:39 PM

FedEx said Friday it decided not to renew a key domestic contract with Amazon, a move that could pinch the online retail giant during peak shipping seasons when it’s sometimes struggled to get packages to customers on time.

The decision highlights tension between the long-time partners. Amazon has built its own logistics network over the past few years and is delivering more of its own customers’ packages, lessening its dependence on FedEx and other shipping partners. At the same time, the online retailer can’t deliver all of its own packages -- especially as shopping surges over the holidays.

FedEx made the decision “as we focus on serving the broader e-commerce market,” the company said in a statement Friday. The decision applies to FedEx’s domestic Express contract with Amazon, which is the speediest option FedEx offers for shipping via air. It does not affect its international services or any last-mile contracts.

Amazon accounted for less than 1.3 percent of FedEx’s $65.6 billion revenue last year, the company said.

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Read more: https://www.washingtonpost.com/technology/2019/06/07/fedex-declines-renew-us-express-contract-with-amazon-move-that-could-affect-retailer-during-holiday-shipping-season/

[YOHABLO]

1. Amazon hasn't begun it's own Postal Delivery Service? Amazon Express?

[PoliticAverse]

2. Amazon promises drone delivery "within months"...

https://abcnews.go.com/Business/amazon-promises-drone-delivery-months/story?id=63494811

[matt819]

3. Ho hum

I'm guessing this means. . . absolutely nothing.

The article observes that Amazon's shipping accounted for less than $1 billion of FedEx's revenues. Okay, what about net? And what impact will that loss have on FedEx? Don't know. Don't care. Probably not much, or at least nothing that might be offset by obtaining other lucrative contracts.

Again, I'm speculating here, but I suspect that UPS can - or will figure out a way to - absorb the additional Amazon shipments. Also, USPS. More for them. Yay! And then there's Amazon's own delivery services which are under development. And, who knows, maybe some other carriers will step in and potentially make some money. TNT maybe? There are also regional carriers that might step in to fill the breach.

Didn't I read that in some places they are using employees to deliver packages in their areas. That sounds like a disaster in the making, but perhaps Uber-like services will pop up to fill the gaps.

As for drone delivery? I'll believe it when I see it, but I can't see that filling the gap left by FedEx pulling out of Amazon's delivery ecosystem.