FedEx reveals how much revenue it derives from Amazon, posting a statement on its website stressing that the e-commerce giant isn’t its biggest customer.
The statement said, “The percentage of total FedEx revenue attributable to Amazon.com represented less than 1.3 percent of total FedEx revenue for the 12-month period ended December 31, 2018.”
Memphis-based FedEx has long maintained that Amazon wasn’t its biggest customer, and that no single customer accounted for more than 3% of revenues.
Some analysts have identified FedEx’s largest customer as the U.S. Postal Service, for which FedEx carries premium mail products by air under a multiyear, $1.5 billion-a-year contract.
The new disclosure came amid a discussion of FedEx Extra Hours, a new service that helps retailers including AutoZone and Best Buy better compete with Amazon by speeding up delivery times.
A Bloomberg story on FedEx Extra Hours Tuesday reported FedEx’s Amazon business percentage. Based on company-wide revenues of $65 billion in the fiscal year ended last May 31, it would translate into less than $845 million in revenues.
FedEx’s Chief Marketing Officer Brie Carere told Bloomberg that FedEx doesn’t expect the Amazon percentage to increase because the company sees more growth potential in helping Amazon’s retail competitors.
FedEx’s competitive stance against Amazon has held much fascination among analysts and financial news purveyors in recent years as Amazon has launched an airline, built a network of distribution centers and deployed delivery vans across the country.
FedEx Extra Hours extends FedEx Express shipping cutoff times by five to eight hours, to as late as midnight, so e-commerce providers can offer next-day local delivery or two-day shipping in the continental U.S.
The service was launched with Best Buy and AutoZone in test markets in the summer of 2017 and since has expanded to more than 100 large U.S. markets, including Memphis.
FedEx Extra Hours puts more volume into the FedEx Express network and pushes it through sorting facilities at a time when pickup and delivery trucks normally would be parked, thereby increasing utilization of assets.
When the expedited service was announced last December, Carere noted the majority of online orders are placed after 4 p.m., and 64 percent of online shoppers expect orders placed by 5 p.m. to qualify for next-day shipping.
Raj Subramaniam, who became FedEx Express president and chief executive earlier this month, told analysts in December, “When you combine the store infrastructure of retailers with our logistics infrastructure, it allows retailers to offer a compelling value proposition for orders received late in the day. And the launch of our FedEx Extra Hours is clearly a very, very positive step in this regard.”
