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FedEx (FDX) announced on Friday that it was not renewing its contract with Amazon for shipping parcels on FedEx Express. This decision comes as FedEx and Amazon compete more directly in the logistics of delivery.
Amazon is under increased pressure to deliver parcels quickly. In April, Amazon announced its intention to start delivering packages to Prime customers in one day rather than two. FedEx followed up in May and planned to deliver seven days a week.
In a press release, FedEx announced its intention to serve the broader e-commerce market with continued partnerships with brands such as Walmart and Target. The company said Amazon accounted for less than 1.3% of its total business figure in 2018.
A FedEx spokeswoman told CNN Business that the decision only concerned air transport. Other contracts between FedEx and Amazon (AMZN) remains intact.
"We respect FedEx's decision and thank them for their role in serving Amazon's customers over the years," Amazon said in a statement.
The contract ends on June 30th.
Both companies are increasingly competing in several areas. For example, the two companies are developing stand-alone ground robots that drive on sidewalks to deliver packages to neighborhoods. Earlier this week, Amazon unveiled its latest drone just a few months before deliveries.
Amazon has also announced plans to invest $ 1.5 billion in a hub for its cargo planes near Cincinnati, Ohio.
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