FedEx (FDX) shares saw a notable increase on Tuesday following the announcement of a new collaboration with Amazon.com (AMZN) for last-mile delivery services. FedEx shares were up at in premarket trading, building on a gain from Monday.
Shares of United Parcel Service (UPS) also benefited, since the November 5 election, largely due to concerns over high tariffs advocated by President Donald Trump, which typically negatively impact shipping volumes.
FedEx, which had previously walked away from its Amazon business in 2019, has now re-entered the partnership. Amazon spokesman Steve Kelly confirmed the agreement, stating that FedEx would serve as one of several third-party partners for package delivery.
This new relationship with FedEx does not replace UPS, as Amazon continues to utilize multiple logistics providers, including UPS, the U.S. Post Office, and FedEx. Despite this, Amazon delivers two-thirds of its own packages, amounting to approximately 5.9 billion packages in the U.S. in 2023, according to Capital One Shopping Research. The USPS delivered around 7 billion packages in 2023, while FedEx Ground delivered close to 3 billion packages in its fiscal year ending May 2024.