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Hmm... how often does a company fire a big customer? This would seem significant and probably related to either a pricing dispute or the fact that one way or an
by nutjob2 7y ago
Hmm... how often does a company fire a big customer? This would seem significant and probably related to either a pricing dispute or the fact that one way or another Amazon is encroaching on FedEx's core business.
- delfinom 7y agoIt's just FedEx is not renewing a shipping contract. Amazon could still ship using FedEx at retail/non contract rates.
- sokoloff 7y agoGiven the depth of discounts for even 1 million parcels per year, it’s a safe bet the Amazon won’t be paying Fedex retail rates for any non-trivial number of customer orders.
- gist 7y agoExactly. Fedex sees the writing on the wall and figures it might as well wring the last cent of profit out of the relationship (and who knows what profit was on it with the contract). In other words if they feel that Amazon will cut them out then what is the motivation to serve them at discount rates? In a way this is similar to a commercial landlord with a tenant that wants to go on month to month. You take advantage of the opportunity and charge more rent for the accommodation. Zero reason for Fedex to not do what is in their strategic interest here it's business.
- petra 7y agoIt's close to Amazon's 1-day shipping announcement. At least for some products, probably, Fedex Express was needed to achieve 1-day shipping. And Walmart does have many more local warehouses.
- treis 7y agoI think this is more a "You can't fire me, I quit" kind of thing. I'm guessing Fedex wasn't willing to make the concessions Amazon wanted. Better to have the news story be FedEx drops Amazon than vice versa.