FedEx to end air shipping contract with Amazon

The contract impacts shipping via FedEx air services, meaning that FedEx will still deliver Amazon packages as a last-mile delivery partner.

FedEx is ending its Express shipping contract with Amazon and will instead focus on growth in the broader e-commerce market, the carrier announced on Friday. The contract impacts shipping via FedEx air services, meaning that FedEx will still deliver Amazon packages as a last-mile delivery partner. 

"There is significant demand and opportunity for growth in e-commerce which is expected to grow from 50 million to 100 million packages a day in the U.S. by 2026," a FedEx statement said. "FedEx has already built out the network and capacity to serve thousands of retailers in the e-commerce space, including brands such as Target, Walgreens and Walmart."

"FedEx has made the strategic decision to not renew our FedEx Express contract with Amazon as we focus on serving the broader market. We are excited about the future of e-commerce and our role as a leader in it," the statement added.

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Amazon issued the following statement via a spokesperson: "We respect FedEx's decision and thank them for their role serving Amazon customers over the years."

FedEx has long insisted that Amazon is not a direct competitor, but it's no secret that Amazon has been building out its own delivery network as a way to ween off of carriers like UPS, FedEx and USPS for last mile logistics. Amazon historically has optimized its supply chain, distribution and logistics and then handed off last mile services to carriers. However, shipping is a massive expense for Amazon, and that has fueled the company's efforts to develop new delivery methods.  

Amazon's ambitious delivery plans now run the gamut of logistics methods, from robots to autonomous drones to a Prime-branded cargo plane fleet. The drone delivery service -- initially launched in 2013 -- hit a milestone just this week when Amazon announced a new commercial delivery drone that it says will be delivering packages to customers in months.