FedEx to end Amazon contract for air delivery service
Business Live - Jun 10th, 15:04
FedEx says it has decided to not renew its contract with Amazon.com for US cargo delivery through FedEx Express, the unit that delivers packages on planes.
The move comes as Amazon builds out its own delivery network of planes, trucks, and vans, a move seen as a long-term challenge to FedEx and delivery rival United Parcel Service (UPS).
FedEx described the decision as a strategic move that would allow it to focus on the broader e-commerce market, a group that would include rivals of Amazon that are scaling up one-day and two-day delivery. FedEx forecast that the market would double to 100-million packages a day in the US by 2026.
The decision does not affect any existing contracts between Amazon and other FedEx business units or relating to international services, the package delivery company said.
Amazon accounted for less than 1.3% of FedEx's revenue in 2018, the company said in its statement.
In recent years Amazon has steadily grown its fleet of delivery aircraft, which Air Transport Services Group (ATSG) and Atlas Air Worldwide Holdings have operated. The company is investing $1.5bn to build an air cargo hub in northern Kentucky, setting it up to rely less and less on others for air shipping.
Amazon has leased 40 cargo planes and has signed an agreement to induct 10 more planes to join the fleet in the next two years.
Growing delivery infrastructure
DA Davidson analyst Tom Forte said that even though Amazon has ramped its delivery infrastructure, it is still heavily dependent on UPS and FedEx.
Forte said that FedEx and UPS operate a duopoly in shipping and Amazon is trying to break that by trying to be more self-sufficient to lower shipping costs.
“We respect FedEx’s decision and thank them for their role serving Amazon customers over the years,” Amazon said.
A task force set up by President Donald Trump recommended in December that the US Postal Service should have more flexibility to raise rates for packages, a move that could hurt profits of Amazon and other large online retailers.
Shares of FedEx pared gains and were up nearly 1% at $158.28 in Friday afternoon trading. Amazon shares were up 2.8% at $1,802.78.Business Live
How to attract and retain the best employees
14/10/2019 - 11:15
Finding the right employee can be a time-consuming process – especially when you’re looking to hire the best candidate for the job. But there are simple steps one can take to find employees who are best suited for your culture and the future success of your business.
Christmas is coming: 3 ways retailers can ensure a more profitable festive season
14/10/2019 - 10:29
According to Stats SA, retail figures for December 2018, showed an annual decline of 1.4% instead of the expected 2.1% growth. It seems like brick-and-mortar stores are battling against depleting footfalls and decaying consumer confidence.
Securing your brand is a C-suite challenge
11/10/2019 - 14:37
Brand value is a key component of a company’s success and it takes several years to establish by implementing a brand strategy that supports the business. However, in today’s digital environment, brand value can be compromised in a matter of minutes and negatively affect the brand and company. As such, brand security is an issue that needs constant attention to minimise possible reputational damage to the brand and the associated risk of losing customers.
Understanding workforce management in security
10/10/2019 - 15:08
In an increasingly connected business environment, decision-makers need to more effectively leverage the human resources they have at their disposal. According to dormakaba South Africa, this is where a good workforce management system that can manage personnel as a strategic asset becomes imperative.
Temporary employment services offer a dynamic staffing solution to help the retail sector cater for the seasonal peak
10/10/2019 - 14:56
As we head into the final stretch of the year it is time to start gearing up for the added demands of the summer season. From factories and warehouses to retail outlets, the entire retail chain is under added pressure during this seasonal time of high demand. Temporary employment services (TES) can help all areas of the retail sector to cater to this peak with additional and flexi staff exactly when and where they are needed, with the right skills for the job, and none of the administrative headache of hiring permanent or contract staff.