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FedEx won't renew its deal for Amazon ground deliveries

It's trying to reduce its dependence on Amazon.
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AP Photo/Lynne Sladky

FedEx is still busy cutting its ties with Amazon. The courier company has declined to renew its contract for Amazon ground deliveries when it expires at the end of August, leaving just an international delivery contract between the two. FedEx isn't shy about the reasoning, either -- it's about independence. This lines up with FedEx's plan to "focus on the broader e-commerce market," according to a statement sent to Bloomberg.

You could see this coming. Amazon has been gradually creating its own shipping network, complete with a fleet of leased aircraft and a fledgling home delivery service, in a bid to deliver goods faster and on its own terms. There wasn't much point to FedEx preserving its arrangements if Amazon was eventually going to negate them, especially when it wasn't going to suffer much of a loss by backing away (just 1.3 percent of FedEx's 2018 revenue came from Amazon).

As it stands, UPS might pick up the slack. It still has contracts with Amazon, and it's considerably more dependent on the internet giant than FedEx. An Amazon plan to increase overnight deliveries sparked a 30 percent increase in UPS' American next-day shipments, for example. Your expedited orders will likely still arrive quickly -- you will, however, have to get used to seeing different trucks outside your door.

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