According to Bloomberg news, FedEx, the shipping partner of Amazon has denied renewing its contract with the company, thus ending the partnership. The reason is that Amazon has started to create its own delivery service, which would have created problems in the future between the companies.
The contract is set to end in August this year, and just 2 months before the expiration, the delivery service gave its statement regarding the renewal of the contract. FedEx delivery service was used mainly for delivery by air, but after an announcement, it has been confirmed that the delivery service by air has been stopped in the U.S.
The company still has a ground delivery contract with Amazon, so as to cover the gap between warehouses and the customers, which would end by the end of August. Amazon had started its own delivery services, which had made it quite a fit rival in the field, due to which FedEx decided to end the contract. Another reason is that Amazon is not one of the most stable customers of the company, it hardly makes 1.3 percent of the total revenue, which is almost negligible when compared with the company’s other customers.
“This change is consistent with our strategy to focus on the broader e-commerce market, which the recent announcements related to our FedEx Ground network have us positioned extraordinarily well to do,” said the spokesperson of FedEx during an interview with The Verge.
As can be seen from the past few months, Amazon has tried a lot to make it’s delivery services compatible. With hiring cargo planes, creating Prime facility for one-day delivery, having facilities of delivering directly in the customer’s garages and homes and also the company is known to use drones to deliver the package safely in the hands of the customer; all these to make the customer experience satisfactory. The company has constantly changed its ways in the field of delivering the packages, which has made it unique in a way.
“Amazon is constantly innovating to improve the carrier experience and sometimes that means reevaluating our carrier relationships. FedEx has been a great partner over the years and we appreciate all their work delivering packages to our customers,” said one of the representatives of Amazon during an interview.
From the above statement, it can be clearly said that the termination of the contract is not going to bother Amazon much as they have started their own delivery services.
Apart from this, it has been heard that FedEx and UPS are on the road of expanding their delivery business, which even includes seven days delivery service. With Extra Hours, a technology developed by FedEx, the company has been able to make its delivery through ships, a lot faster. FedEx has also said about its delivery robot, which was seen earlier this year and is currently in the experimentation phase; once successful would make it easier for the company to make its services faster and compatible.