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FedEx picks sides in Walmart's battle with Amazon

A FedEx express truck
A FedEx Express truck in California. Photo: Robert Alexander/Getty Images

FedEx announced last week it would not renew its contract to provide express shipping service for Amazon in the U.S., passing up on $850 million in annual revenue.

Why you'll hear about this again: As Amazon muscles into FedEx's turf on shipping — with its online trucking platform already undercutting the the industry's big players' average shipping rates by up to 33%, according to FreightWaves — the shipping giant sent a signal that it was getting behind Amazon's biggest rivals.

  • If Amazon wants to roll out Uber for package delivery shipping (its Flex delivery service is a gig economy-style program the company has been offering employees $10,000 to leave their Amazon jobs for), FedEx isn't going to caught flat-footed the way the taxi industry was.

Shots fired: "FedEx has already built out the network and capacity to serve thousands of retailers in the e-commerce space, including brands such as Target, Walgreens and Walmart," a FedEx spokeswoman said in a statement Friday.

Go deeper: Loosening Walmart's vise-grip on low-income consumers