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FedEx is Cutting Ties With Amazon

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FedEx is Cutting Ties With Amazon

Just two months after FedEx terminated its air delivery contract with Amazon, the Associated Press has reported that FedEx will no longer make ground deliveries for Amazon as well. 

In recent years, Amazon has leased jets, built package-sorting hubs ar airports, and even launched a program to let its contractor drivers start their own businesses while delivering packages in vans bearing the Amazon logo. FedEx, in turn, is worried that Amazon’s actions will lower overall prices, hurt its revenue, and “negatively impact our financial condition and results of operations,” said FedEx in a statement.

This is why FedEx has recently announced that it will be assisting retail giants such as Walmart and Target, who are seeking to sell more and more merchandise online to compete with online retail giants like Amazon. FedEx has also stated, regarding the decision, “This change is consistent with our strategy to focus on the broader e-commerce market.” This has allowed FedEx to make such a decision, as both Walmart and Target are now more significant Amazon competitors than ever. 

Though the two companies are now competitors, whether they wish to admit it or not, Amazon executive Dave Clark stated in a tweet, “Nothing but respect for FedEx but they were very small piece of our network and vice versa, we wish them nothing but the best (conscious uncoupling at its finest).” However, FedEx’s decision to dump Amazon requires the tech giant to find a new way to handle millions of packages while the company simultaneously is trying to reach its goal of promising Prime members a one-day shipping guarantee.

Amazon will now have to redistribute packages between the U.S.P.S. and U.P.S., as well as work to develop their own delivery service even further to compensate.

If you are an Amazon seller and require the assistance of an experienced Certified Public Accountant, please contact Ebiz Accounting for an initial consultation. We provide Amazon business accounting services to clients in New York and throughout the United States.

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