What’s going on here?

FedEx announced its own exit: it’ll stop providing express delivery for Amazon packages in the U.S. this summer.

Why this matters

• From a numbers perspective, Amazon represented under 1.3% of FedEx’s total revenue last year.
• But from a broader perspective, FedEx’s decision is telling Amazon, “we’d like to see you do it better.”

That’s because Amazon has been busy building out its own delivery network, which looks a lot like the early days of FedEx.

• Amazon has 42 branded aircraft in the U.S. and plans to grow the fleet to 50 by the end of the year; it broke ground on its own air cargo hub in Kentucky set to open in 2021; and drones!

Looking ahead

• Executives say there’s plenty of demand for its services from parties that aren’t building homegrown competitors (like Target, Walmart, and Walgreens).
• FedEx is prepping for e-commerce to double to 100 million packages per day in the U.S. by 2026.

Content source: kgrant. (2019) "FedEx Cuts Off Amazon". Morning Brew. Available from: https://www.morningbrew.com/stories/fedex-cuts-off-amazon/ [Accessed 14 June 2019]