Amazon has inked a multi-year deal with FedEx to handle residential deliveries of certain large packages. This agreement, which came into effect in February 2025, marks a significant shift in Amazon's logistics strategy as it navigates changes in its shipping partnerships.
UPS, which has been Amazon's largest shipping partner, is set to massively reduce its handling of Amazon shipments. By mid-2026, UPS plans to cut its Amazon-related shipment volumes by over 50%, a move that will result in 20,000 job cuts and the closure of 73 facilities. Reuters noted this sharp reduction as a clear signal of shifting dynamics in the logistics industry.
Despite the new tie-up with FedEx, Amazon will maintain its relationships with other delivery services, such as UPS, USPS, and various third-party providers, along with its own last-mile delivery network. The announcement had an immediate impact on the market, prompting a 1.2% increase in FedEx shares during after-hours trading, illustrating investor confidence in the new partnership.