On Wednesday, courier delivery service company FedEx revealed that it will end its ground-delivery contract with Amazon, and that it won’t renew it at the end of the month.
FedEx dubbed the cancellation as a “strategy to focus on the broader e-commerce market”.
In June, FedEx had announced that it was ending its express U.S. shipping contract with the e-commerce giant, a decision which only affected air services. At the time, FedEx said that less than 1.3% of its total revenue came from serving Amazon during the 12-month period ended Dec. 31.
In late June, Amazon unveiled its Delivery Service Partners program through which it aims to attract entrepreneurs who can create their own local delivery networks with up to 40 vans each. The company also developed a delivery drone that is expected to boosts delivery speed for its Prime customers in North America. It also has a $1.5 billion hub opening in northern Kentucky in 2021 where it’s expanding Amazon Air fleet to include 50 planes. It is hoping that its air network would make two-day shipping possible across the U.S.