FedEx’s Express Delivery Contract With Amazon Is Ending – The Buyer’s Journey 71

FedEx’s express delivery contract with Amazon is ending. Now the shipping giant now aims to focus on the broader e-commerce market. We discuss what this means for Amazon.

Federal Express

Last Friday, FedEx announced it will not be renewing its express delivery contract with Amazon. FedEx said in their statement that this change will not impact any existing contracts with Amazon. In addition, FedEx says that “Amazon.com is not FedEx’s largest customer. The percentage of total FedEx revenue attributable to Amazon.com represented less than 1.3 percent of total FedEx revenue for the 12-month period ended December 31, 2018.”

FedEx continues, “There is significant demand and opportunity for growth in e-commerce which is expected to grow from 50 million to 100 million packages a day in the U.S. by 2026. FedEx has already built out the network and capacity to serve thousands of retailers in the e-commerce space. We are excited about the future of e-commerce and our role as a leader in it.”

The Next Step

As Kirsten Corosec points out in her Tech Crunch piece, FedEx is expanding it’s delivery options. For instance, Corosec writes that FedEx revealed an autonomous delivery bot in February called the SameDay Bot. The bot will go through testing this simmer in select cities, including FedEx’s hometown Memphis. The autonomous delivery bot is being developed in collaboration with DEKA Development & Research Corp. founder Dean Kamen,  best known for inventing the Segway  and iBot wheelchair.

FedEx’s express delivery contract coming to end marks and interesting turn for the company. Len points out that many shipping companies had serious growth on the back of e-commerce. Furthermore, Len believes that this is the first concrete moment where we see FedEx realizing that Amazon is becoming a looming threat. After all, Amazon already has its own owned logistics networks, and is even offering shipping services to small businesses. Therefore, the 1.3 percent loss is merely drops in the bucket.

Check out our next episode where we’ll discuss a news article covering the Retention stage of The Buyer’s Journey.

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Matt McGrorty

Videographer / Podcaster

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