By Paul Ziobro

FedEx Corp. is ending its air shipping contract with Amazon.com Inc. in the U.S., signaling the delivery company no longer wants to fly packages for an online retailer that is developing its own delivery network.

In a surprise move Thursday, FedEx said it won't renew the domestic contract, which runs through June 30, for its Express unit. It will still have other shipping contracts with Amazon, including through its ground network and international services.

Amazon ships millions of packages a day, though it spreads the orders among FedEx, United Parcel Service Inc. and the U.S. Postal Service, as well as its own growing delivery operations. FedEx said Amazon represented just 1.3% of FedEx's total revenue in 2018.

FedEx said it is severing its air relationship with the e-commerce giant to focus on serving a broader array of retailers, including large chains such as Walmart Inc., Target Inc. and Walgreens Boots Alliance Inc.

"There is significant demand and opportunity for growth in e-commerce which is expected to grow from 50 million to 100 million packages a day in the U.S. by 2026," the company said in a statement. "We are excited about the future of e-commerce and our role as a leader in it."

Write to Paul Ziobro at Paul.Ziobro@wsj.com

(END) Dow Jones Newswires

June 07, 2019 14:23 ET (18:23 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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