FedEx Express, the company’s air cargo segment, has ended its relationship with Amazon. According to FedEx’s most recent quarterly report, the company certainly needs fewer Amazon-like customers — ones with huge volumes but low margins. Package volume through FedEx’s non-overnight air deliveries has jumped by 24%, but revenue per package has decreased by 7%. Visit Business Insider’s homepage for more stories.
Amazon is a big customer for delivery companies, but moving millions of Prime boxes isn’t a high-margin business for some.
“Amazon packages are very small, and they don’t take up a whole lot of space, but at the same time there’s not a whole lot of money to be made by moving them,” Cathy Roberson, an analyst with Logistics Trends & Insights LLC, told Business Insider.
FedEx’s most recent quarterly earnings highlighted that. The Memphis, Tennessee-based package carrier’s segment of US deferred packages (non-priority shipments) jumped by 24%. But the revenue per package dipped by 7% — to $15.41 a package from $16.52. It shows the difference between volume and yield — a high-volume segment isn’t necessarily one that drives operating profits.
US deferred packages are non-overnight air shipments that don’t need to be delivered before a certain
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