FedEx news for Wednesday about the company dropping more Amazon (NASDAQ:AMZN) deliveries has FDX stock dropping.
FedEx (NYSE:FDX) says that it won’t be renewing its contract with Amazon to cover ground deliveries for the e-commerce giant. This comes after the company announced back in June that it would no longer handle shipping the retailer’s products via its planes.
What all of this FedEx news means is that the company is trying to distance itself from Amazon. That makes sense for the delivery company as AMZN is already building out its own delivery service.
So how exactly will FedEx survive without Amazon? The company is betting that it will get enough business from rivals of the online retailer to make up for the missing deliveries. That may be true, but investors in FDX stock are still seem wary about the decision.
“This change is consistent with our strategy to focus on the broader e-commerce market, which the recent announcements related to our FedEx Ground network have us positioned extraordinarily well-to-do,” FedEx told The Wall Street Journal.
This news comes shortly after FedEx announced plans to expand its delivery and pickup services. The company is going to start doing more business on the weekends. That will have it bringing in lower-paid workers to handle the weekend deliveries and pickups. This could also help it make up for lost business from Amazon.
FDX stock was down 1% as of Wednesday morning.
As of this writing, William White did not hold a position in any of the aforementioned securities.