Amazon established a partnership with FedEx to manage big package deliveries after UPS reduced its delivery services. The new agreement became official in February and internal sources indicate Amazon receives better pricing terms than it did with UPS.
The announcement caused FedEx stock prices to rise by 7% during Monday’s trading session because investors welcomed the new partnership. The partnership between Amazon and FedEx will operate as an additional third-party delivery service for Amazon while UPS and USPS maintain their existing positions.
The multi-year agreement marks a positive change in the business relationship between Amazon and FedEx since they ended their home delivery partnership in 2019. The agreement represents a beneficial partnership according to FedEx which demonstrates improved business collaboration.
UPS has decided to concentrate on delivering packages that generate higher profits. The company announced it will decrease Amazon package deliveries by more than half during the next six years while eliminating 20,000 positions and shutting down 73 facilities.
Amazon enhances its logistics capabilities through this strategic partnership which enables the company to expand its e-commerce operations with multiple delivery providers.
