FedEx is Ending Ground-Delivery Contract With Amazon (cnbc.com) 68
FedEx said Wednesday it will end its ground-delivery contract with Amazon and won't renew it at the end of the month. From the report: "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," a FedEx spokesperson said. Shares of FedEx and Amazon were down at least 1% in premarket trading. Amazon was not immediately available to comment. FedEx announced in June that it is ending its express U.S. shipping contract, which only affected air services. At the time, FedEx said it was a "strategic decision" that would not affect its other contracts with Amazon. At the time, FedEx said less than 1.3% of total revenue was attributable to Amazon during the 12-month period ended Dec. 31.
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In June Fedex said it was not going to renew its U.S. air-delivery contract with Amazon, but leave everything else in place. Then, today, Fedex said it is ending it's ground-delivery contract with Amazon.
not a dupe
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Think farther ahead. Amazon built their own cloud because it was cheaper than paying for hosting, then they opened it up to other customers, now half the internet runs on AWS.
Now they've built their own shipping company because it's cheaper than paying FedEx. Coming soon: Prime shipping, any business can ship from anywhere to anywhere using Amazon's shipping infrastructure for less than FedEx.
FedEx and UPS are *fucked* like all the web hosting businesses that disappeared when "the cloud" became a thing.
Re:You're still fucked FedEx (Score:5, Interesting)
From the Article. less then 1.3% of FedEx revenue is from Amazon. I also expect the contract agreements with Amazon would cost FedEx more then 1.3%
Amazon is a huge company. However it is primarily a consumer company, while there is a lot of business to be made in B2B business. So for FedEx they probably would rather focus on that type of business, which probably is more affordable, as there is less of the last mile problem dropping off a 2lb box to a house. vs stopping a a business often with a shipping dock, people on site to sign for it. and with known pickup and drop off times.
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At least until Amazon decided it wants a piece of the B2B business.
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Rats, "decides" not "decided", itchy finger.
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FWIW, for the last ~2 years I'm getting slightly better prices at Walmart.com, with free 2-day shipping, or free pick-up at a local store if I need something faster. Free returns with a label or at a store. Walmart is basically Amazon with local stores and no shady third party sellers hiding under their umbrella.
For years there really was no reason to shop anywhere other Amazon, because their prices, shipping, the online platform, returns, reviews, etc. had no competition. They forced the entire retail indu
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They're hoping to cut off Amazon's legs but it's too late, Amazon is already building out their own FedEx. FedEx is completely screwed, but at least they still had short term gains. Now they have nothing.
How is FexEx completely screwed? Plenty of entities other than Amazon ship stuff. Probably why Amazon represents less than 2% of revenue for FedEx.
Amazon is less than 2% of FedEx's business (Score:2)
They're hoping to cut off Amazon's legs but it's too late, Amazon is already building out their own FedEx.
No they know they can't really damage Amazon. Their problem is that Amazon has gotten big enough that they can't negotiate a sufficiently profitable deal with Amazon. Plus it's been obvious for years that Amazon is going to be a direct competitor so this was probably inevitable.
FedEx is completely screwed, but at least they still had short term gains. Now they have nothing.
Even though Amazon is a big customer they still are less than 2% of FedEx's business. I think you misunderstand the dynamics of this relationship rather badly.
Re: You're still fucked FedEx (Score:1)
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1. This is for FedEx Ground (you don't get Next Day Deliveries via Ground)
2. UPS, USPS have similar services as well.
3. From my experience which actually seems to differ from a lot of others. I have found that USPS is actually faster delivery then FedEx or UPS for standard shipping.
For products I want right away, I actually avoid Amazon, and will shop online with a Shop that has a retail space, and the online order will reserve the product for me, where I can pick it up myself. That way I can really get t
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I tend to avoid Amazon sellers. I look for Amazon or "fulfilled by Amazon", precisely because it avoids such problems. The last return I did, I did not have to pack it. I just took it unpacked to my local UPS store and as soon as I handed it over, I got my refund.
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I actually do the opposite....if you do other sellers you can still avoid sales tax.
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That way I can really get the product faster, and much less hassle if I have to return it.
You print a label and put the item back in the box / envelope it came in and tape it shut. Literally. It's 5 minutes. Simply not possible that anything that involves driving and speaking to a human is less hassle than that.
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I cannot recall... (Score:3)
I cannot recall the last time FedEx delivered something I ordered from Amazon. It's either UPS or Amazon's non-flying drones.
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Amazon's non-flying drones.
I see what you did there... LOL
Amazon first (Score:2)
Then the rest will follow and Amazon will deliver those too.
"Shares of ..." EVERYBODY. (Score:5, Insightful)
Dear CNBC: Shares of EVERYBODY were down 1% this morning at the opening bell. Mentioning those two here makes it seem like it is only them and somehow magically related to this announcement, but the whole market dropped by that much, in which case the announcement was utterly irrelevant to the 1% drop and therefore it shouldn't have even been mentioned.
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But it's fun to make stories -
shares of MSFT down 1% because year of the linux desktop
shares of SpaceX down because tardigrades land on the moon!
shares of Apple down because Oranges!
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It's CNBC. The fastest way to go broke is to actually believe anything they say.
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makes it seem like
At this point, both left [youtube.com] and right view *NBC as "fake news". Slashdot is diminished by linking to their content.
Here's a Yahoo! Finance piece:
https://finance.yahoo.com/news... [yahoo.com]
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I think the consequences of emerging monopoly power are showing.
I've long had a deeply ambivalent feeling about Amazon. They are remarkably good at online retail. When you want something, even something weird and unusual, they've got it at a competitive price and (up until recently) pretty good service.
The problem is their goal has always been a monopoly on the online retailing of *everything*. That's something no company should have. And now they're close if not there. Half of all online purchases in t
predictable (Score:2)
Amazon's starting their own freight delivery service and in any case pays ridiculously low contract rates with Fedex, why would Fedex want to continue to support a customer that's building their own replacement?
https://www.cnbc.com/2019/02/1... [cnbc.com]
FedEx is doing this, not Amazon (Score:2)
I find new respect for FedEx who is throwing away part of their business, albeit business that comes from a soon to be competitor. How foresighted.. FedEx is playing long ball here, that bodes well for their future success.
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Perhaps FedEx has finally woken up. It needs to replace delivering Amazon orders with it's own retail web site, selling the same products Amazon does, and handling logistics direct from the producer to the end using customers. Amazon is not a retail company, it is a logistics company, it enables that logistics via it's retail web site where it sells the products it handles logistics for, from the producer to the end user customer. As for Amazon so for FedEx and in fact any logistics company, that retail web
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Good on them! (Score:2)
Amazon is only out for Amazon, there is no win-win for them.
There goes the neighborhood (Score:2)
must be more to the story (Score:2)
Just the other day a Memphis paper had an article how the amount of cargo at Memphis FedEx has dropped 6%. With dropping Amazon, it could even be more even though most was ground shipping. IMO, there must be more to the story than just Amazon is creating their own competing delivery service.