Amazon and FedEx have entered a package delivery deal.
Business Insider reported, citing an internal document, that a new agreement between the e-commerce giant and delivery company was inked in late February.
Under the deal, FedEx will transport some packages that Amazon customers have ordered to their doors on behalf of the e-commerce giant, according to the outlet.
Amazon spokesperson Steve Kelly told FOX Business the company has “reached an agreement with FedEx to serve as one of several third-party partners to deliver packages to our customers.”
FedEx “joins our other third-party partners like UPS and the USPS, that work alongside our own last mile delivery network to help us balance capacity to best serve customers,” he said.
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In the U.S., the deliveries of more than two-thirds of Amazon’s packages are taken care of by its own logistics network, according to Amazon.
“FedEx has the global network, capacity, and expertise to serve the shipping needs of thousands of retailers in the e-commerce space. We have reached a mutually beneficial, multi-year agreement with Amazon to provide residential delivery of select packages, including large items,” FedEx told FOX Business.
Business Insider reported the internal document that it saw said Amazon will experience “cost favorability” compared to UPS through its partnership with FedEx.
UPS has long been a third-party delivery partner of Amazon. In January, it and Amazon agreed that the e-commerce giant would trim the volume of Amazon packages it handles by more than 50%.
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The purpose of the new partnership with FedEx is not to take the place of UPS, according to Amazon.
FedEx previously had a partnership with Amazon that included a deal to make U.S. ground deliveries. That contract ended in 2019.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AMZN | AMAZON.COM INC. | 212.36 | +3.72 | +1.78% |
| FDX | FEDEX CORP. | 232.95 | +15.12 | +6.94% |
Brie Carere, executive vice president and chief customer officer at FedEx, said at a Bank of America conference on Monday that the delivery company “just struck a new deal” with Amazon, according to a SeekingAlpha transcript.
She said the yield “will be accretive to our system average in the domestic market.”
“We have a very unique capability that we cover all ZIP codes in the U.S., and we also move heavy, hard-to-handle packages better than anyone at all,” she said, adding that the business will be “predominantly large package.”
Asked whether the packages will be bulky or freight, Carere said it was “going to move in our surface network.”
“It will be part of the FedEx Ground portfolio, so it’s not quite that big,” she explained. “It will be parcel, but it is heavier weights. It’s going to push up our average weight per package, and it will push up our yield.”
Carere told the host it “will not be our largest customer” but FedEx “feel[s] good about” the new deal with Amazon.
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