FedEx Ends Express Shipping With Amazon

by | Jun 10, 2019

3 min read


FedEx Terminates Express Contract With Amazon 

In an announcement Friday, FedEx said they will not be renewing their express delivery contract with e-commerce giant Amazon. In their statement, FedEx said that the decision will not impact any other existing contract between the two companies.

To temper the breaking news, FedEx made a point to say that Amazon is not their largest shipping customer. “The percentage of total FedEx revenue attributable to represented less than 1.3 percent of total FedEx revenue for the 12-month period ended December 31,2018,” the statement said.

The decision stems from an explosion of growth in e-commerce with FedEx estimating that the industry will expand from 50 million to 100 million packages a day in the U.S. by 2026. This expansion sees companies like FedEx and Amazon focusing on efficiency and opportunity in their businesses.

Amazon said in a separate statement that they respect the decision by FedEx and thanked them for their role in serving Amazon customers. In spite of the change in express shipping, FedEx will continue to serve as a carrier and last-mile delivery partner.

Amazon Fires Back at Walmart in One-Day Shipping Race

This week, Amazon announced that it would be offering one-day shipping to its Prime members on more than 10 million products. This announcement comes three weeks after Walmart unveiled its own one-day shipping plan.

Amazon’s model for one-day shipping certainly has an edge over Walmart’s. While Walmart is offering one-day shipping on 222,000 products, Amazon is offering it on more than 10 million. Walmart also requires a $35 minimum purchase to qualify for one-day shipping, where all Amazon Prime members qualify with no minimum purchase necessary.

Amazon’s vast shipping network is the driving force behind its advantage. The shipping giant has 100 delivery stations, more than 100 fulfillment centers and its own cargo planes. This infrastructure has allowed the company to test its limits and cut their famous two-day shipping in half.

Amazon previously said that they plan to spend more than $800 million this quarter in order to roll out the one-day shipping plan for more Prime members. While the plan currently only applies to the U.S., Amazon hopes they can soon expand it globally.

USPS to Test Self-Driving Vehicles

In a move that will surely frighten those who are anxious about technology’s growing power, USPS (United States Postal Service) announced that it would complete a two week trial of self-driving vehicles.

The trucks, which are owned by San-Diego based TuSimple, will perform five round-trip journeys between Dallas and Phoenix. The 2,000-mile trips will force the vehicles to cross state lines and operate on major interstates.

Thankfully for other drivers on the road, the trucks will not be flying completely solo. To ensure the trips go smoothly, each vehicle will have a safety engineer and driver onboard for the duration of the journey.

The self-driving vehicles could potentially help solve USPS’s driver shortage. At the moment, it is difficult for USPS to find drivers who are willing to go on trips like the Dallas-Phoenix one because it requires being on the road for long stretches of time.

The program would also save money and fuel for USPS, making it cost-efficient and environmentally friendly. USPS hopes to have completely autonomous vehicles on the road by the end of 2020 or early 2021.

Topics: Amazon, Customer Experience, FedEx