FedEx is dropping Amazon from the sky.
The shipping company said Friday that it is ending its domestic air shipping contract with Amazon. The current contract expires at the end of June.
“FedEx has made the strategic decision to not renew the FedEx Express U.S. domestic contract with Amazon.com, Inc. as we focus on serving the broader e-commerce market,” the company said in a statement.
Walmart, Target, and other traditional retailers have expanded their digital sales in efforts to compete with Amazon.
FedEx has said that Amazon is not its biggest customer. On Friday, the company said that Amazon accounts for less than 1.3 percent of its total revenue.
The move was not expected but it comes after reports that Amazon is developing its own delivery network. FedEx has other contracts with Amazon, including ground shipping and international shipping, that will continue.
“There is 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 said. “FedEx has already built out the network and capacity to serve thousands of retailers in the e-commerce space. We are excited about the future of e-commerce and our role as a leader in it.”
Amazon ships its packages through UPS and the United States Postal Service in addition to FedEx.
In response, Amazon issued a statement thanking FedEx for its service.
COMMENTS
Please let us know if you're having issues with commenting.