Islamabad, May 13, 2025: Amazon has reached a new delivery deal with FedEx for handling some of its oversized packages, both firms confirmed Monday.
The move follows UPS’s recent decision to wind down certain low-margin shipments for Amazon, along with cutting 20,000 jobs as part of a broader cost-reduction plan.
FedEx shares jumped 7% on the day after announcing the multi-year agreement. The deal, signed back in February, covers residential deliveries of select heavy or bulky orders from Amazon.
According to a report from Business Insider, the agreement is expected to give Amazon a pricing edge over what it previously paid UPS, citing a leaked internal company document.
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However, Amazon clarified that this new partnership doesn’t replace UPS entirely. FedEx will instead join a lineup of other third-party carriers that includes UPS, the U.S. Postal Service, and Amazon’s own last-mile delivery teams.
FedEx described the new arrangement as a “mutually advantageous” long-term contract that benefits both sides.
This new deal may mark a reset in the relationship between Amazon and FedEx. The two companies had parted ways back in 2019, when Amazon was still expanding its internal logistics network.
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Earlier this year, UPS announced it would slash Amazon-related deliveries by over half by 2026, shifting its focus toward fewer but more profitable clients.
In late April, UPS followed through by revealing plans to lay off thousands of workers and shut 73 of its facilities as part of its push to streamline operations and lower costs.
The rivalry between FedEx and UPS has been intense over the past several years, with both frequently competing to win new business and poach each other’s clients.
This latest move by Amazon reshapes that dynamic once again as it doubles down on expanding its shipping partners.
