FedEx will not renew its Express domestic contract with Amazon. Instead, it will focus on “serving the larger e-commerce market”. The contract with Amazon expires on June 30 and only impacts air services.
FedEx pointed to “significant demand and opportunity for growth in e-commerce” and stated that 1.3% of FedEx’s total revenue comes from Amazon.
By breaking ties with Amazon for air shipments, FedEx seems to be in a position of disinterest in offering its own airline network. FedEx declined to comment beyond his statement.
Amazon might take a 40% stake in Atlas Air Worldwide Holdings and ATSG. It has also expanded its aircraft fleets and cargo hubs.
The severing of ties does not affect existing contracts or Amazon shipments through other FedEx business units, such as FedEx Ground, last-mile deliveries or international shipments.