FedEx will no longer provide air freight for e-commerce giant Amazon within the United States. The transportation company decided not to renew its contract with Amazon for strategic reasons.
In July, Amazon's domestic contract with FedEx Express, FedEx's cargo airline, will end. The break will not affect Amazon's other transport arrangements. Amazon and FedEx Express' international contracts will also remain unchanged.
In a statement, FedEx says it wants to serve a broader e-commerce market. That market is expected to double to 100 million packages in the US by 2026. "FedEx has built the network and capacity to serve thousands of e-commerce retailers. We are excited about the future of e-commerce and our leadership role in it."
FedEx stresses that Amazon is not its biggest customer; the online player accounted for less than 1.3 per cent of FedEx's sales in 2018. This is partly due to Amazon's strides in airand sea freight in recent years. By purchasing its own fleet, Amazon was able to command favourable rates from carriers.
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