The GigReporter

According to a recent Wall Street Journal article, Amazon has formed a new partnership with FedEx for delivering large packages to homes. This multi-year agreement marks a significant reconciliation after their previous split in 2019.

The partnership emerges in the wake of UPS's announcement that it will phase out more than half of its Amazon business over the next 18 months. UPS, which derived about 12% of its revenue ($1.07 billion) from Amazon last year, has responded by cutting 20,000 operational positions and closing over 70 facilities.

Amazon spokesperson Steve Kelly emphasized that FedEx will join other third-party partners, including UPS and USPS, that work alongside Amazon's own last-mile delivery network to balance capacity. Amazon clarified that the FedEx deal isn't meant to replace the UPS relationship, noting that over two-thirds of Amazon packages in the U.S. are delivered via Amazon's logistics network.

This strategic partnership illustrates how economic pressures and supply chain constraints are driving former competitors to find mutually beneficial arrangements. By diversifying delivery partners, Amazon gains reliability and flexibility, while FedEx secures a valuable revenue stream during challenging economic times, demonstrating how supply chain stakeholders can adapt through strategic collaboration rather than pure competition.