Things don’t seem to be working quite well for FedEx Corporation (NYSE:FDX). It has been going through challenges, one of them being the exit of Amazon.com, Inc (NASDAQ:AMZN). The retail giant will no longer be depending on the delivery services of FedEx.
State of affairs
The divorce might have been a bitter one, But FedEx thinks of it as a new start! It believes that it is time to strategize and come out in a much stronger way.
FedEx has been looking closely at its business operations and returns and has come to several important conclusions. The first discovery is that Amazon hasn’t been one of its most profitable businesses. This retail guru has been pressing the company a lot when it comes to making bargains.
Amazon is undoubtedly one of the companies with the largest volumes of products that need to be shipped. A significant number of carriers have been seeking to seize the opportunity, and Amazon knew that. It has been taking advantage of this attribute to push FedEx to ship products at very low rates.
The retail leader has been very good when it comes to wooing customers to its business. It unveiled a program that would see its prime members enjoy free delivery services.
A closer outlook
FedEx asserts that the exit of Amazon isn’t one of its major problems. The career points a finger to product consumers that make purchases in huge volumes. These customers have been exerting a lot of pressure on FedEx wanting products shipped much quicker. FedEx finds their attitude rather irrational, considering that they are not willing to pay for what they are pushing for.
Analysts have been following closely on the business operations of Amazon. They have concluded that the retail leader accounts for quite a minimal amount of FedEx’s revenue. Its share is insignificant in such a way that it can’t be considered one of the major customers of the career.
These analysts have also disclosed that Amazon has been relying more on other services. They have mentioned UPS, and the US Postal Service as some of those Amazon has been relying on.