Amazon has reached a multi-year agreement with FedEx to handle residential deliveries of select large packages, the companies confirmed Monday, marking a significant shift in logistics strategy as Amazon adjusts to United Parcel Service's decision to reduce its business with the e-commerce giant.
The new partnership, signed in February, comes as FedEx works to expand its footprint in e-commerce delivery and follows UPS's recent announcement that it plans to cut more than 50% of its Amazon shipment volumes by late 2026. UPS also said it would eliminate 20,000 jobs and close 73 facilities nationwide as part of a broad cost-cutting and restructuring initiative.
FedEx shares jumped 7% following Monday's announcement, outpacing broader market gains. The Memphis-based delivery firm described the partnership as a "mutually beneficial, multi-year agreement."
"We've reached an agreement with FedEx to serve as one of several third-party partners to deliver packages to our customers," Amazon spokesman Steve Kelly said Monday.
FedEx will join the company's roster of third-party delivery partners, including UPS and the U.S. Postal Service, working alongside Amazon's own in-house last-mile network. Business Insider previously reported the deal provides "cost favorability" over UPS, citing an internal Amazon document.
Amazon and FedEx previously severed residential delivery ties in 2019, when Amazon was rapidly building out its own logistics network. The renewed relationship signals a potential reset between the two firms, both of which have been locked in a competitive battle for e-commerce volume.
Amazon emphasized that the agreement with FedEx will not replace UPS. More than two-thirds of Amazon packages are now delivered through its internal network, the company said.
In 2023, Amazon accounted for roughly 12% of UPS revenue, totaling about $1.07 billion. As UPS retreats from its largest customer, FedEx's new role may offer it a strategic boost amid an ongoing fight for logistics market share.
