FedEx Loses After Amazon Ditch -- Will It Recover?
FedEx (NYSE: FDX) made a bold move this summer by announcing that it will discontinue its shipping and delivery contracts with Amazon.com (NASDAQ: AMZN). In June, the giant shipping company said that it will not be renewing contracts for air services with Amazon, and in August, it upped the ante with a statement that it would not be renewing ground contracts, either.
Theoretically, this shouldn't be big news, and it shouldn't bother anyone in either industry. Along with its first announcement, FedEx said that business from Amazon "represented less than 1.3% of total FedEx revenue for the 12-month period ended Dec. 31, 2018." And Dave Clark, Senior Vice President of Operations at Amazon, tweeted "they were [a] very small piece of our network and vice versa."
So why does everybody care? These are two powerhouse brands, each of whom has the potential to cause a massive shakeup in their respective industries and in the general economy. And, perhaps the impact isn't as negligible as the companies think.
Source Fool.com
