- Amazon claimed less than 1.3% of FedEx’s2018 revenue, FedEx said on Tuesday.
- Amazon is not FedEx’s largest customer, the shipping giant added.
- FedEx’s statement on Amazon came out of seemingly nowhere.
Apropos of nothing, FedEx announced on Tuesday just how little Amazon figures into their bottom line.
The Memphis, Tenn. shipping giant wrote in a statement (emphasis our own):
It appears to be the first time FedEx has had to release a statement on one of its own customers and how much (or little) that customer claims the shipper’s bottom line.
Business Insider contacted FedEx to learn more about why it released this statement on Tuesday, who is FedEx’s largest customer, and what specific services FedEx provides Amazon.
“While there has been significant media interest in what Amazon is doing to expand their in-source delivery capability, this should not be confused as competition with FedEx,” a FedEx spokesperson told Business Insider. “The global infrastructure, the technology, the capabilities and the knowledge needed to compete in our business is quite extraordinary, and we have built that up over 40-plus years.”
Amazon is building its own capacity – for itself, and maybe others too
Amazon is quickly building its own logistics capacity, which means it won’t have to rely on FedEx and UPS, the world’s top package shippers, to move its deliveries every year.
Amazon is developing its own logistics capacity in air, sea, and land. Morgan Stanley analysts said that Amazon is on track to have 100 planes by 2025. The mega-retailer already has 40 planes in a cargo air fleet that was established in only 2015.
And in the past year, Amazon shipped nearly 4.7 million containers of goods from China to the US in ocean freighters.
Signs are also showing that Amazon is interested in shipping for others and not just developing an in-house delivery program.
Last week, the company expanded its Amazon Shipping home-delivery service to the New York area. The service nixes fuel surcharges and other fees that FedEx and UPS place on its goods.
UPS and FedEx leaders say it’s not a problem
Meanwhile, the leadership at both FedEx and UPS have long emphasised that they see Amazon as nothing more than a customer.
“I think the prospects that this company is going to be ‘disrupted,’ which just occurs over and over again, to quote a previous statement, is fantastical,” FedEx CEO Fred Smith said to investors on a call in December. “So I’ll leave it at that.”
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