FedEx CEO Raj Subramaniam said the competitive threat of Amazon's new Supply Chain Services is dismissed during an interview at the FedEx World Hub in Memphis.
The move marks a shift in the logistics landscape as Amazon opens its internal delivery network to outside businesses. This transition creates direct competition for traditional carriers like FedEx and UPS, who have historically managed the bulk of third-party shipping.
Amazon launched the Supply Chain Services offering on Monday, May 4 [3]. The announcement triggered an immediate reaction in the financial markets. FedEx shares fell nine percent to roughly $359 [1], while UPS shares dropped 10 percent to approximately $97 [2].
Subramaniam said the company remains competitive in the face of this new offering. The CEO's comments come as FedEx prepares for a significant structural change. The company plans to spin off FedEx Freight on June 1, 2026 [4].
Industry analysts suggest that Amazon's ability to leverage its existing infrastructure allows it to undercut traditional pricing models. By offering end-to-end logistics to other merchants, Amazon is no longer just a customer of the major carriers, but a primary rival in the global freight market.
FedEx continues to operate its massive hub in Tennessee as the center of its global network. The company maintains that its scale and specialized services provide a moat against the tech giant's entry into the sector.
“Amazon opened its logistics network to other businesses, creating direct competition for FedEx and UPS.”
The entry of Amazon into third-party logistics signals a transition from a symbiotic relationship to a direct rivalry. While FedEx is attempting to unlock value through the spin-off of its freight division, the immediate market volatility reflects investor concern over Amazon's ability to commoditize shipping and erode the profit margins of traditional legacy carriers.
