FA24

NEW YORK (AP) — FedEx is severing ties with Amazon as the online retailer builds out its own delivery fleet and becomes more of a threat.

The decision by FedEx also illustrates how e-commerce has become universal as major retailers ramp up their online presence.

The announcement Wednesday that FedEx would no longer make ground deliveries for Amazon comes two months after the delivery company said it was terminating its air delivery contract with Amazon.

Amazon.com Inc. is building up its own fleet of air and ground transportation to cut its reliance on FedEx, UPS, and the U.S. Postal Service.

At the same time, e-commerce has become a priority for retailers like Walmart and Target, meaning that FedEx can distance itself from Amazon.com without suffering the same competitive damage it might once have.

https://www.foxcarolina.com/news/fed...c19ddc01c.html

NeverHome

Makes sense. FedEx doesn’t want to keep feeding the monster. Is this a good idea? Only time will tell, though I’m sure they will be just fine.

JulesWinfield

I read somewhere Amazon accounts for around 1% of their revenue. If that's the case, they're fine.

nitefr8dog

I am surprised it took this long. If UPS follows, all the service failures will be on Amazon this holiday season.

wjcandee

That's a good example of how to lie with statistics. The lack of Amazon blew a huge hole in FedEx Expess volume, as it now will with ground. People at Express are already being laid off, working reduced hours, etc. Ground is an independent contractor model, and all those folks who invested in trucks, etc., are going to have a very sad year.

FedEx was the most-expensive ground and express option for Amazon. Amazon will expand the use of other providers and organic delivery, who will be happy for the business. FedEx has to pray that e-commerce continues to expand and that in the next 3-5 years, other shippers will take most of Amazon's place. (If there is a downturn, all bets are off.) Even with a decent amount of growth, it will be an okay time for the FedEx executives, and a tough time for the folks on the front line.

It will be interesting to see if FedEx will feel a need to change its fleet plans and/or its air network operations due to the substantially-lower volume, or whether it will try to fly the same routes with the same metal for a couple of years until they are able to replace the volume (if they are able to replace the volume). Or maybe they will cut prices dramatically to fuel volume (as they have done with their slowest Express service to their biggest customers to move Ground volume to the Express division to mask the size of the volume loss). If they do that, though, what was the point of the exercise?

At the end of the day, this is only going to slow FedEx Express's need for planes and pilots. How much remains to be seen, but if the effect on the ground-handling, sorting, drivers, etc., is any indication, it's not good.

So while some on here who hate Amazon are cheering, those who want the music to keep playing as pilots move up the ladder should be nervous. Slowing movement to the top tier pilot jobs at FedEx actually hurts all the people who are cheering because they think this somehow hurts Amazon, which it doesn't.

HvypurplePylot

Annnnd we're back.

PW305

Always appreciate reading your insights wjcandee... can you please link your source? Are you talking about the voluntary buyouts?

Sunny1

And this is a good example of how anyone can come on here and make sh!+ up! Not a bit of truth to this statement.

wjcandee

Uh-huh. Sez you.

Freighthumper

UPS probably CANT follow. Amazon is a much larger part of their business.

http://www.freightwaves.com/news/des...ith-each-other