In June, word leaked that FedEx would no longer deliver Amazon packages by air, and today, both companies confirmed they were ending their ground-delivery contract as well.

Amazon has relied more heavily on UPS and USPS than on FedEx anyway, but as the Washington Post pointed out in June, the lack of an air contract with FedEx could hurt Amazon during the holidays “if it sees a flood in last-minute orders and needs extra capacity.”

Meanwhile FedEx is actually ramping up its ecommerce ambitions. Without the demands of Amazon, could FedEx actually offer improved service to other merchants and retailers? FedEx had specifically called out Target, Walgreens, and Walmart in a statement to EcommerceBytes in June when it said it had the capacity to serve thousands of retailers in the ecommerce space.

FedEx is also moving to 7-day residential delivery year-round and is ditching USPS for FedEx SmartPost deliveries and adding large-package capabilities, as it previously announced.Amazon’s stealth pilot program may have a lot to do with FedEx’s decision to cut the ecommerce giant loose – Amazon is offering sellers shipping services in certain geographies, picking up and delivering orders to customers – even those received through other channels such as eBay or Walmart.

Source: Will Amazon Be Able to Deliver without FedEx? – EcommerceBytes