Market Overview

FedEx Will End Ground Shipments Of Amazon Packages

FedEx Will End Ground Shipments Of Amazon Packages

FedEx Corporation (NYSE: FDX) confirmed Wednesday it won't renew its a contract with, Inc. (NASDAQ: AMZN), marking the second time doing so in a few short months.

What Happened

FedEx said its contract to handle Amazon packages through its ground network won't be renewed when it expires at the end of the month, according to The Wall Street Journal. This follows a June decision to terminate its air-shipping contract with the e-commerce giant.

FedEx's decision to sever ties comes at a time when Amazon is building out its own delivery infrastructure. The online company continues to invest in various methods of transportation, including leasing cargo planes and financing local delivery drivers.

For the time being, WSJ said FedEx will continue handling some of Amazon's international shipments.

Why It's Important

FedEx's decision to distance itself from Amazon gives the delivery company better exposure to the universe of e-commerce companies who compete with Amazon, WSJ wrote. In fact, FedEx indicated after ending its air-shipping agreement with Amazon it will focus on better serving main rivals Walmart Inc (NYSE: WMT) and Target Corporation (NYSE: TGT).

FedEx said it will be "positioned extraordinarily" to address the broader e-commerce markets. On Amazon's end, the company needs to account for millions of packages FedEx handles during the busy holiday season while keeping its commitment to expanding availability of one-day shipping.

Related Links:

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Photo credit: Álvaro Ibáñez from Madrid, Spain

Posted-In: Wall Street JournalNews Media Best of Benzinga


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