Aug 7, 2019 - Technology

FedEx ends Amazon ground deliveries

Two men load packages onto a large truck

A FedEx warehouse in Florida. Photo: Joe Raedle/Getty Images

FedEx said Wednesday that it will not renew its U.S. ground delivery contract with Amazon, Bloomberg first reported.

The big picture: The shipping giant's decision, coupled with its move just weeks ago to end its contract to transport Amazon packages by air, comes as Amazon transforms from a customer to a competitor. The e-commerce company is adding trucks, planes, employees and even an air hub to strengthen its logistics arm — directly targeting the big U.S. shippers.

Context: After months of dismissing Amazon as a potential threat, FedEx labeled the tech company as a competitor in its most recent 10-K report, stating that its continued expansion into shipping and logistics "will reduce our revenue and could negatively impact our financial condition and results of operations."

By the numbers:

  • As we've reported, Amazon has surpassed all of its logistics partners to become its own biggest shipper, according to data from Rakuten Intelligence. Amazon now ships around 47% of its own packages. FedEx ships just under 2%.
  • As e-commerce continues to grow in the U.S. and around the world, FedEx still has scores of customers in the industry. Amazon currently makes up only about 1% of FedEx's revenue.

"FedEx has been a great partner over the years and we appreciate all their work delivering packages to our customers," an Amazon spokesperson tells Axios.

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