FedEx (FDX) Stock: Amazon Returns to Former Partner as UPS Steps Back

By: coin central|2025/05/13 21:00:13

TLDR:FedEx stock rose after Amazon announced a new partnership agreementThe companies had previously ended their relationship in 2019Amazon will use FedEx to deliver “select large packages” in a multi-year dealUPS recently shed some Amazon business, calling it “not profitable” and “not a healthy fit”Amazon delivers two-thirds of its own packages while using multiple shipping partnersThe e-commerce delivery world got a shake-up this week as FedEx and Amazon announced a renewed partnership years after their split. FedEx shares climbed 6.9% in regular trading on Monday, with additional gains in pre-market trading Tuesday.FedEx Corporation (FDX)The surprise announcement comes after years of separation between the two companies. FedEx had walked away from its Amazon business in 2019 as the e-commerce giant increasingly became a competitor in the delivery space.“We’ve reached an agreement with FedEx to serve as one of several third-party partners to deliver packages to our customers,” Amazon spokesman Steve Kelly confirmed in an emailed statement.FedEx was equally direct about the new arrangement. “FedEx has the global network, capacity, and expertise to serve the shipping needs of thousands of retailers in the e-commerce space,” the company stated.The logistics provider added that they “have reached a mutually beneficial, multi-year agreement to provide residential delivery of select large packages for Amazon.”The specifics of the deal remain largely undisclosed. The companies haven’t revealed which Amazon packages FedEx will handle or the financial terms of the agreement.Amazon signs delivery deal with FedEx to fill void after UPS pulls back https://t.co/b3Rl4WIkev pic.twitter.com/ssRO04E3g1— New York Post (@nypost) May 13, 2025UPS Takes a Step BackThis new partnership follows UPS’s recent decision to reduce its Amazon business. UPS CEO Carol Tomé stated bluntly during an April earnings call that Amazon’s “volume is not profitable for us, nor a healthy fit for our network.”The UPS pullback created an opening that FedEx appears eager to fill. An internal Amazon document cited by Business Insider suggests that engaging FedEx is a strategic move to address capacity constraints.The document also mentions that the partnership offers Amazon “cost favorability” compared to previous arrangements with UPS. This hints at potential cost savings for the e-commerce giant.UPS had faced challenges with profitability from its Amazon business, which represented more than 10% of UPS sales in 2024. When UPS announced it was shedding some Amazon business in its January earnings update, its shares dropped 14%.FedEx, meanwhile, has managed to grow earnings since the original Amazon split. The company earned about $12 per share in 2019 and is expected to earn over $19 in 2025.The new deal doesn’t mean Amazon is abandoning its own delivery infrastructure. The e-commerce leader delivers approximately two-thirds of its own packages, with multiple third-party partners handling the rest.In 2023, Amazon delivered about 5.9 billion packages in the U.S., according to Capital One Shopping Research. That’s compared to roughly 7 billion packages for the USPS and about 3 billion for FedEx Ground.The most recent information confirms that FedEx will focus on “select large packages” for Amazon, suggesting a specialized role in the partnership rather than handling general package volume.The post FedEx (FDX) Stock: Amazon Returns to Former Partner as UPS Steps Back appeared first on CoinCentral.

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