E-commerce giant Amazon (AMZN) is adding FedEx (FDX) as a new partner to help with large package deliveries. Under a new multi-year deal, FedEx will handle residential shipments of bulky items like furniture and TVs.
Protect Your Portfolio Against Market Uncertainty
- Discover companies with rock-solid fundamentals in TipRanks' Smart Value Newsletter.
- Receive undervalued stocks, resilient to market uncertainty, delivered straight to your inbox.
Amazon spokesperson Steve Kelly confirmed that FedEx will join its roster of third-party partners, including logistics company United Parcel Service (UPS) and the U.S. Postal Service (USPS), working alongside Amazon’s own delivery fleet.
A Win-Win for Both FedEx and Amazon
The deal is a mutually beneficial one for both parties. FedEx will receive a notable increase in delivery volume, while Amazon can strengthen its logistics network without significantly raising its costs.
The market reacted positively to the development. FedEx stock jumped 7% on Monday, while Amazon shares climbed more than 8% by the end of the day. In addition to the FedEx deal, the recent agreement to lower tariffs between the U.S. and China also helped fuel investor optimism.
UPS Reduces Package Volume by 50%
This new deal with FedEx comes weeks after UPS made significant changes to its partnership with Amazon. Earlier this year, UPS announced plans to reduce the volume of Amazon packages it handles by more than 50% by the second half of 2026. In line with this, UPS recently revealed plans to cut 20,000 jobs and close 73 facilities to streamline operations and focus on higher-margin deliveries.
In response, Amazon is acting swiftly to ensure its massive delivery network continues running without any interruption. This deal with FedEx is expected to help fill the gap left by UPS. However, Amazon clarified that the deal with FedEx is not meant to replace UPS. Instead, FedEx will join other third-party partners, like USPS, to support Amazon’s logistics operations.
Is AMZN Stock a Buy, Hold, or Sell?
Turning to Wall Street, the analysts’ consensus rating for Amazon is Strong Buy, based on 46 Buy and one Hold ratings over the last three months. With that comes an average AMZN stock price target of $239.90, representing a potential 14.98% upside for the shares.
