A worker pushes Amazon.com Inc. packages in front of a FedEx Corp. truck in New York.
Christopher Lee | Bloomberg | Getty Images
FedEx said on Wednesday that it will terminate its ground delivery contract with Amazon and will not renew it at the end of the month.
"This change is in line with our strategy to focus on the broader e-commerce market, as the recent announcements related to the FedEx Ground network have positioned us extremely well to do," said a FedEx spokesman.
FedEx and Amazon shares were down at least 1
FedEx announced in June that it is terminating its express U.S. transportation contract, which only affected air services. At that time, FedEx said it was a "strategic decision" that would not affect the other contracts with Amazon. At the time, FedEx said that less than 1.3% of total revenue could be attributed to Amazon over the 12-month period ended December 31.
Amazon has continued to grow its own delivery network.
In late June, Amazon announced a Delivery Service Partners program in an effort to attract entrepreneurs who can create their own local delivery networks with up to 40 vans each. earlier that month, it debuted with a delivery drone that it hopes will eventually accelerate delivery for Prime members in North America.
Amazon also has a $ 1.5 billion opening in Northern Kentucky in 2021 where it expands its Amazon Air fleet to include 50 aircraft. Amazon said its airline can make "two-day shipping possible almost anywhere in the United States." Still, FedEx has helped provide "the last mile" of delivery services, bringing packages to the customer doors.
FedEx said in May that it will extend its ground delivery service to seven days a week starting in January.