FedEx has decided to terminate its contract with Amazon US for its express deliveries, while keeping its foreign contracts alive. This contract accounted for over $850 million in annual revenue. This strategic move means that the others services providing Amazon with delivery services for their one and two day deliveries now can pick up the leftover business.
These other service providers include UPS and the US Postal Service along with Amazon itself. None of the service providers have given any specific numbers, and making an estimate is difficult.
In a press release, FedEx claimed that Amazon is not the company’s largest customer. In fact, it only accounted for 1.3% of the gross annual revenue for the delivery giant.
In 2018, UPS also stated that no one customer made up for more than 10% of the consolidated revenues in a year.
In May, Amazon began work on its 3 million square footage facility at the Cincinnati International Airport. This project is worth $1.5 billion and will begin operations in 2021. It will host up to 100 Prime Air cargo planes.
Along with this, Amazon has been encouraging its workforce to quit and start their own delivery service. To further facilitate it, they are offering a three month salary equivalent, and a $10, 000 start-up fund to those willing to become independent contractors with up to 40 vehicles. Employees who take this up can join as Delivery Service Partners program which was launched in 2018.
In 2015, Amazon introduced its Flex delivery service which is an economy style business opportunity for all those who can get past their background checks, and can deliver packages in their own vehicles. Partners of the Flex service can earn $18-$25 an hour and choose their own hours for delivering. This is available in ten US regions.
As UPS and US Postal Service gear up to deliver more packages for Amazon, their own fleet of planes and trucks are readying for a more independent future.
Thomas Brown
Thomas Brown is the go to member of the team when it comes to retail sector news and reporting. His dedication towards sifting through the stories and writing the most essential material is what makes him a valuable member of the Business Deccan family.
