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Adstoppi Blog | Amazon loses contract with FedEx Express

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FedEx has decided not to renew one of its shipping contracts with Amazon amid increased competition between the two companies, according to CNBC. The contract in question is Amazon’s FedEx Express contract, which according to Amazon is used for air transportation of packages and is not used for last-mile, ground deliveries. As previously reported, Amazon Prime’s two-day deliveries are mostly handled by UPS, and Amazon says its contracts with FedEx to handle any other logistics, including filling the gaps not plugged by UPS, are still in place.

Still, FedEx’s decision not to renew its contract with Amazon is evidence of escalating tensions between the US domestic shipping industry and the country’s largest and most dominant e-commerce company. Amazon’s success is due in part to offering free shipping, an immense cost it has largely paid out to shipping companies like FedEx, UPS, and the United States Postal Service.

It is no secret Amazon wants to own every link in its logistics chain, from the warehouses that store its products to the planes, cargo ships, and delivery trucks that move its products around the world. Just last month, Amazon CEO Jeff Bezos celebrated construction crews breaking ground on the company’s $1.5 billion, 3 million-square-foot air hub attached to the Cincinnati/Northern Kentucky International Airport. Earlier this week, Amazon revealed its brand-new hybrid Prime Air delivery drone, a device that Amazon hopes will one day compete with FedEx and UPS delivery trucks.

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