On Wednesday, FedEx confirmed that it's ending its ground delivery contract with Amazon at the end of August. Though FedEx won't deliver your Amazon packages anymore, it's not the only company that drops Amazon boxes off at people's doorsteps. In other words, your orders should keep getting delivered as usual.
As Bloomberg reported, FedEx said in a statement that it is planning to end its ground delivery service contract with Amazon in order to " ... focus on the broader e-commerce market." FedEx noted that Amazon deliveries actually only accounted for about 1.3% of its revenue in 2018, Bloomberg added, so this decision likely won't substantially impact Amazon customers.
As the Wall Street Journal described, Amazon typically divides its deliveries among several companies, which currently include FedEx, UPS, and the United States Postal Service (USPS). Reuters added that Amazon has also been significantly expanding its own own delivery network, including through acquiring planes, trucks, and vans, and exploring in-home delivery options. So, while the termination of FedEx's contract definitely represents a change in how both companies will do business, it shouldn't affect your Amazon deliveries all too much.
As David Ross, an analyst with Stifel Financial Corp, described to Bloomberg, many of the packages FedEx would have normally delivered for Amazon will simply be given to UPS for delivery after August.
Bloomberg added that, after August, FedEx plans to focus more intensively on delivering packages for companies that are considered Amazon's competitors, like Target and Walmart. “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,” FedEx said in a statement, per Bloomberg. “FedEx has already built out the network and capacity to serve thousands of retailers in the e-commerce space.” CNN Business indicated that FedEx currently has partnerships with Walgreens and Walmart to offer next-day shipping to customers — and has a shipment partnership with Target as well.
Amazon emphasized in an email to Bloomberg that it's focused on improving deliveries in the future and also appreciative of FedEx's partnership.“We are constantly innovating to improve the carrier experience and sometimes that means reevaluating our carrier relationships,” Amazon said Wednesday, per Bloomberg. “FedEx has been a great partner over the years and we appreciate all their work delivering packages to our customers.”
As the New York Times described, Amazon has been expanding its own delivery services at a rapid pace. For example, the paper noted, Amazon's delivery service accounted for 30% of all of its ground deliveries in 2018, compared to 20% in 2017. As the outlet described, this means that, in 2018, Amazon's own delivery service handled about 4 million items per day — and that number is expected to increase.
So, if you're an Amazon shopper, its' pretty unlikely that you'll see much difference in the pace at which your orders are delivered once FedEx exits its contract. You're just not going to see a FedEx truck pull up to your home with an Amazon package anymore. Instead, UPS, USPS, or Amazon itself will fill this role.