Amazon Partners with FedEx for Residential Deliveries
Amazon has hired FedEx to handle some of its large package deliveries, the companies announced on Monday. This development comes weeks after UPS revealed it was halting its less-profitable deliveries for Amazon and cutting 20,000 jobs. FedEx shares surged 7% on Monday, outperforming Wall Street benchmarks.
The Memphis-based delivery company stated that the multi-year agreement covers residential delivery of select large packages for Amazon. According to an internal document cited by Business Insider, the deal with FedEx provides Amazon with “cost favorability” compared to its delivery rival UPS. The agreement, signed in February, will see FedEx join Amazon’s third-party partners, including UPS and the USPS, and work alongside its own last-mile delivery network.
Amazon emphasized that this new partnership will not replace UPS. FedEx described the agreement as “mutually beneficial” in a statement. This deal may signal an improvement in relations between FedEx and Amazon, which had cut residential delivery ties in 2019 as Amazon was expanding its delivery services network.
The move comes as UPS announced in January its plan to reduce shipment volumes for Amazon, its largest customer, by more than 50% by the second half of 2026. UPS aims to focus on fewer but more profitable deliveries. As part of this plan, UPS revealed it would slash 20,000 jobs and shut 73 facilities, alongside cost-cutting and efficiency projects under a major operational restructuring.
FedEx and UPS have been engaged in a fierce battle for market share over the last five years, often poaching whole or partial customer accounts from each other.
