The breakup of FedEx and Amazon continues as the two companies confirm the end of the partnership by the end of August 2019.
FedEx, Amazon Sever Ties
Just two months ago in June, the courier announced that it would no longer provide their domestic Express or air services to Amazon. Now, Bloomberg reports that FedEx is not renewing their ground-shipping contract with Amazon when it expires at the end of the month. The company will still conduct international deliveries for the e-commerce company.
Both companies have spoken out about the end of the relationship, explaining that the breakup is something in line with long-term plans for their respective businesses.
"This change is consistent with our strategy to focus on the broader e-commerce market," FedEx said in the statement to Bloomberg, adding that these decisions are made to improve service and handling of customer demand.
"We are constantly innovating to improve the carrier experience and sometimes that means reevaluating our carrier relationships," Amazon said in a statement. "FedEx has been a great partner over the years and we appreciate all their work delivering packages to our customers."
Amazon's Growth Affecting Business Relationships
New York Times notes that Amazon breaking up with its longtime courier reflects the company's growing operations that are alienating both rivals and business partners. After all, the e-commerce platform is developing its own delivery service that's geared toward competing with traditional shipping companies.
It's not a welcome development for FedEx, which is left with the major decision of either continuing its relationship with Amazon to the potential detriment of other long-term business prospects or severing its ties and seek out other business opportunities with other companies. The recent announcement indicates that FedEx opted not to stick around to wait for Amazon to overtake their services.
"FedEx has made the decision that is no longer wants to sharpen its executioner's sword," Scott Galloway of the New York University's Stern School of Business explained to New York Times. "It's another reflection of this winner-take-all 'Hunger Games' economy that is dominated by an increasingly few number of companies."
Amazon is currently one of the largest shipping companies in the United States, delivering packages with its ground and air transport. New York Times revealed that Amazon delivered 30 percent of last-mile shipments in the holiday season of 2018, a sharp rise from 8 percent in 2016. By the end of 2019, Amazon is expected to own up to 50 aircraft used for shipping.