Yesterday, FedEx announced that it isn't renewing its US contract with Amazon to transport packages on FedEx Express. The move comes as FedEx and Amazon compete more directly in delivery logistics.
FedEx said in a press release it plans to focus on serving the broader e-commerce market with continued partnerships with brands such as Walmart and Target. The company said Amazon accounted for less than 1.3% of its total revenue in 2018.
Amazon is under increased pressure to deliver packages quickly. In April, Amazon said it planned to begin delivering packages to Prime customers in one day rather than two. Amazon loses contract with FedEx Express as it builds out competing delivery network. The e-commerce giant is increasingly competing with FedEx, UPS, and USPS
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
This will be a differentiating feature for Amazon compared to Wal-Mart, Target and Costco
ReplyDeleteExactly
DeleteHaving its own logistics will give it greater control over its delivery and pricing.
ReplyDeleteThat's the business model, Vikram
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