Category: Industry News

FedEx Corp on Friday decided to not renew its contract with Amazon.com Inc for U.S. cargo delivery through FedEx Express, the unit that delivers packages on planes, a move that reflects the broader trend of the e-commerce company moving services in-house.

Amazon has been building out its own delivery network of planes, trucks and vans, a development that is seen posing a potential long-term challenge to FedEx and delivery rival United Parcel Service Inc, both of which count Amazon as a customer.

FedEx described the decision as a strategic move that would allow it to focus on the broader e-commerce market, a group that would include rivals of Amazon scaling up one- and two-day delivery. FedEx forecast that the market would double to 100 million packages per day in the United States by 2026.

FedEx Corp said it plans to hire about 700 flexible, part-time Express drivers in 160 U.S. residential and rural markets as customer-turned-competitor Amazon.com Inc puts pressure on established delivery firms.

FedEx, like global rival United Parcel Service Inc, is investing billions of dollars to cope with the boom in low-margin residential deliveries, which account for just over half of total package volume versus 20 percent in 2000.

Taking small numbers of packages the “last mile” to shoppers’ doorsteps and far-flung homes is more costly than delivering scads of envelopes and packages to office buildings – the latter of which has been the Memphis-based company’s bread and butte

The California Department of Motor Vehicles is poised to adopt regulations allowing for the testing of light-duty autonomous delivery vehicles on the state’s roads by the end of the year.

DMV held a public hearing Thursday in Sacramento, where members of the industry at the forefront of the new technology voiced their support for the regulations.

Matt Broad, a Teamsters representative, was the lone voice of opposition Thursday. He said the Teamsters believe the proposal to be unnecessary, costly and potentially dangerous.

He said the union represents 100,000 UPS delivery drivers in California.

FedEx plans to deliver packages seven days a week starting next January as it tries to keep up with the continuing boom in online shopping.

The company is also taking back nearly 2 million daily deliveries to homes that are currently handled by the post office.