FedEx Cuts Off Amazon

After everyone left the office for Summer Fridays, FedEx (+0.75%) announced its own exit. It’ll stop providing express delivery for Amazon (+2.93%) packages in the U.S. this summer.Why this matters: From a numbers perspective, Amazon represented under 1.3% of FedEx’s total revenue last year. But from a broader perspective, FedEx’s decision is telling Amazon, “we’d like to see you do it better.”That’s because Amazon has been busy building out its own delivery network, which looks a lot like the early days of FedEx.Amazon has 42 branded aircraft in the U.S. and plans to grow the fleet to 50 by the end of the year.Last month, it broke ground on its own air cargo hub in Kentucky set to open in 2021.And drones!But FedEx isn’t weeping into its purple and orange pillow. Execs say there’s plenty of demand for its services from parties that aren’t building homegrown competitors (like Target, Walmart, and Walgreens). FedEx is prepping for e-commerce to double to 100 million packages per day in the U.S. by 2026.

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