The break between FedEx Express and Amazon underscores the volatility of the e-commerce landscape at a critical time for online businesses. 

With the weight that Amazon throws around in the e-commerce space, it’s no wonder that other logistics players are making strategic decisions to ensure that they stay competitive. While it may not be feasible to pretend that Amazon doesn’t exist, it is possible for other e-commerce stakeholders and e-retailers to carve out niches for themselves independent of the online juggernaut. 

That’s just what FedEx did recently when the shipping company announced that it had made the strategic decision not to renew the FedEx Express U.S. domestic contract with Amazon. FedEx cited its intent to focus on serving the broader e-commerce market as a deciding factor for the break. Although FedEx was careful to note that this specific decision will not affect other outstanding contracts with Amazon, the move is an interesting wrinkle in an increasingly dynamic e-commerce market. 

So what does this mean for FedEx and other players in the e-commerce space — e-retailers included? While it will take some time for the dust to settle to see just how this decision plays out, what is clear is that e-commerce businesses looking to make their way in the online market need the support of experienced logistics professionals if they’re going to navigate a constantly evolving marketplace.

Where This Leaves FedEx

For FedEx, the decision to extricate the domestic wing of FedEx Express from Amazon was a strategic one. The shipping company explained that the move not to renew this particular contract with Amazon was based on an effort to ensure that they can appropriately serve the broader e-commerce market rather than Amazon alone. 

Indeed, FedEx seems to be preparing for a more competitive e-commerce landscape going forward. In its statement regarding the company’s relationship with Amazon, the company noted that Amazon is not its largest customer and that the percentage of total revenue linked to Amazon represented less than 1.3% of FedEx’s total revenue for the 12-month period that ended on December 31, 2018. 

The statement also projected that the domestic e-commerce shipping industry is expected to see considerable growth over the next several years. While shipping companies currently handle 50 million packages per day, FedEx said that it expected that number to rise to 100 million by 2026.

What This Means for the E-Commerce Market

FedEx clearly anticipates a dynamic e-commerce market going forward and has adjusted its business strategy accordingly. While it remains to be seen how FedEx’s peers respond to this decision, what is apparent is that e-commerce sellers will find themselves in an increasingly competitive, volatile landscape. 

Accordingly, this means that e-commerce businesses will have a number of important decisions to make going forward. For instance, should they sell through Amazon on their own? Should they partner with logistics providers who can help them meet Amazon’s rigorous logistics standards? Or, alternatively, should they look for strategic opportunities on their own with the help of fulfillment professionals?

Where Logistics Providers Fit In

These questions don’t have easy answers — answers that will inevitably be different from one business to the next — but e-retailers will need to make them. While larger enterprises may have the resources to navigate changes in the e-commerce landscape on their own, however, it can be difficult for small and mid-sized businesses (SMBs) to stay competitive in the logistics space while still focusing on their own growth. 

To that end, SMBs should consider working with a third-party logistics partner (3PL) or integrated logistics services provider (ISP) capable of supporting and adding value to their supply chain. Whether e-retailers are looking for targeted assistance with fulfillment or are interested in a broader e-commerce solution, the right 3PL or ISP can help. 

With a proven track record of success in the fulfillment and logistics space, Primary Logistics has the resources and know-how businesses need to thrive in the e-commerce marketplace. If you’re interested in navigating the ins and outs of online business, let our team of award-winning logistics professionals help you find the way. 

If you’d like to learn more about how award-winning shipping and logistics services from Primary Logistics and Primary Freight, contact us today at (800)-635-0013.