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FedEx lures online sellers with two-day air shipping at ground rates after Amazon contract ends

International shipping giant FedEx is showing it’s serious about attracting the ecommerce crowd after a high-profile termination of one of its contracts with Amazon to provide delivery using its express air service in the US. FedEx is now offering the same two-day express air shipping direct to some customers for the same price it usually charges for ground service, which is typically much less expensive, the New York Times reports.


FedEx is offering the price cut in order to better compete with rival UPS, the report claims, and to help refactor its product with ecommerce sellers in mind. These include large competitors to Amazon, including Walmart and Walgreens, as well as smaller customers. Note that FedEx will still act as a carrier for Amazon even once its Express contract comes to an end this month, providing last-mile ground shipping.


Meanwhile, Amazon is expanding its own cargo air fleet, with 15 more planes joining its network and a goal of operating a total of 70 planes by 2021. Amazon launched Prime Air in 2016 to help increase its delivery speed to customers, and has been building out the network ever since. The company’s investment in its own delivery and logistics network has helped it provide free two-day, next day and even same day shipping on many items available on the platform to its Prime subscribers.