Fedex, like many businesses sees Amazon as a threat (read more here). Last week Fedex made its boldest and most dramatic move yet — effectively cutting off all business with the sprawling e-commerce giant. While Fedex embraced Amazon in the past, the two have since grown apart ever since Amazon decided to build its own shipping and logistics business internally.
Seeing the signs and not being swayed by short term profit potential Fedex has decided to refocus its e-commerce strategy on the market at large and ignore the pain that can come from dependency on one client.
This is a turning point for U.S. based couriers. Amazon has been creating more and more fulfillment centers, they control their own fleet of planes and trucks, and most importantly have taken aim at fulfillment costs as a way to drive profit.
While Fedex has seen this move as a threat, UPS has taken a different view and embraced the e-commerce giant. UPS has seen Amazon quickly become one of, if not their largest client with close to 10% of the $80 billion companies revenue coming from Amazon.
While both parcel delivery and logistics businesses have grown throughout the e-commerce boom it’s yet to be determined which one has gone down the better path. It’s not often you see such similar businesses move in such different directions. While Fedex’s move seems like the safer route UPS may have an opportunity for greater returns, for a time.