The relationship between Amazon and the United Parcel Service is fraying, The Wall Street Journal reports.
The Amazon account at UPS is, according to the report, worth around $1 billion (£646 million), making it the company’s biggest.
However, Amazon is becoming increasingly unhappy with the rising shipment costs and has been looking to build its own air freight service and is using some of its own trucks and drivers for the last leg of the delivery.
The cost of shipping for Amazon has risen from 10.4% of the company’s revenue to 11.7% in one year, a rise that executives see as worrying, according to the report.
Tensions have been rising over the past two Christmas periods, which are the busiest time of year for both Amazon and UPS. A late influx of orders caused UPS to become overloaded, delivering items late. Amazon helped the company cover the cost of refunds, but it did not help the relationship.
According to The Wall Street Journal, Amazon has recently been requesting more and more routing data from UPS which the company has been wary about providing, as it could help Amazon’s future logistics efforts. The company has hired over 40 UPS executives over the past three years.
“Amazon’s interest is not in doing what may be good for UPS,” Satish Jindel, a parcel-industry analyst for SJ Consulting told the WSJ. “Their interest is in getting control over logistics.”
Business Insider Emails & Alerts
Site highlights each day to your inbox.