FedEx announces termination of Amazon contract for air cargo service
Category: #retail  By Paroma Bhattacharya  Date: 2019-06-10
  • share
  • Twitter
  • Facebook
  • LinkedIn

FedEx announces termination of Amazon contract for air cargo service

FedEx Corporation, the American multinational courier delivery services company recently announced plans to not renew its contracts with e-commerce giant Amazon for U.S. cargo delivery via FedEx Express, the units that delivers packages via planes, cite sources.

The announcement came on the heels of Amazon’s plan to build out its own delivery network of trucks, vans & planes. The move by Amazon is expected to be a long-term challenge to delivery rivals like UPS (United Parcel Services) and FedEx.

For the record, in past few years, Amazon has gradually grown its delivery aircraft fleet, which were operated by ATSG (Air Transport Services Group) & Atlas Worldwide Holdings. Amazon is investing $1.5 billion to set up an air cargo hub in Kentucky to rely less on others for air shipping. Amazon has signed an agreement to introduce 10 more planes & leased 40 cargo planes, for the next two years.

As per credible sources, FedEx described the plan as a strategic move to allow the company to focus on the larger e-commerce market, a group that includes Amazon’s rival, that are scaling up 1 or 2 day delivery. FedEx estimates that by 2016, the market would double to 100-million packages a day in the United States.

The package delivery company reportedly said that the decision would not affect any existing agreements between FedEx business unit & Amazon or any related international services. In 2018, Amazon recorded for less than 1.3% of FedEx's revenue.

According to industry experts, Amazon is still heavily dependent on United Parcel Services & FedEx, even after immensely expanding its delivery infrastructure. Amazon is trying to break the duopoly of FedEx & UPS by becoming more self-sufficient to lower shipping costs.

Amazon said in a statement that the company respects FedEx’s decision and thanked them for serving Amazon over the years. Shares of FedEx were up by 1% at $158.28 and Amazon’s shares were up by 2.8% at $1,802.78.

Source credits : https://www.businesslive.co.za/bd/companies/retail-and-consumer/2019-06-09-fedex-to-end-amazon-contract-for-air-delivery-service/



About Author

Paroma Bhattacharya

Email: [email protected]   

Paroma Bhattacharya

Paroma currently works as a content developer for Algosonline, MSF and a series of alike platforms. Fortified with a post-graduation degree in Journalism and Mass Communication, she delved head long into a writing career, creating resourceful and information enriched ...

Read More

More News By Paroma Bhattacharya

Mirati Therapeutics reveals Phase ½ results of KRAS inhibitor therapy
Mirati Therapeutics reveals Phase ½ results of KRAS inhibitor therapy
By Paroma Bhattacharya

Mirati Therapeutics, an oncology company that engages in the development of targeted therapies, recently released its clinical trial results for MRTX849. Reportedly, MRTX849 is a KRAS G12C inhibitor and the data from P...

Best Buy to offer free next-day delivery feature on various products
Best Buy to offer free next-day delivery feature on various products
By Paroma Bhattacharya

Online retailers are always launching new and attractive deals during the holiday season, as it grosses the highest sale time for the year. Several retailer rollout out attractive offers, such as discounts or complimen...

Nature Tech Corp partners with Aldevron for gene therapy manufacturing
Nature Tech Corp partners with Aldevron for gene therapy manufacturing
By Paroma Bhattacharya

The global cell and gene therapy sector is expected to witness a thriving period of growth over the forthcoming years. In fact, owing to the favorable growth conditions across the industry, numerous biotechnology and p...