FedEx decides against renewing US domestic delivery contract with Amazon

posted on 11th June 2019 by Justin Burns

FedEx has decided not to renew its US package delivery contract with Amazon as the e-commerce battle in the US ramps up, according to reports.

The express freight firm will though continue to deliver packages for Amazon internationally.

The move by FedEx comes amid the rapid growth of Amazon Air – the e-commerce giant’s own air carrier. Amazon has also started work on a $1.5 billion primary air hub at CVG in northern Kentucky.

Report claims that e-commerce in the US will see significant demand and opportunity for growth and the market is expected to grow from 50 million to 100 million packages a day in the US by 2026.

However, various commentators say if Amazon decided to serve third-party clients, it will have a huge impact on the US parcel industry.

In a statement released on Friday (7 June), FedEx said that Amazon accounts for less than 1.3 per cent of its revenue. However, Amazon reportedly paid FedEx $200 million in 2018 alone. UPS is set to gain business from the FedEx decision.