FedEx Not at ‘Great Risk of Being Disrupted’ by Amazon Competition, Says CEO

FedEx is unfazed by any prospect Amazon might compete in package-delivery services, said Rajesh Subramaniam, chief marketing and communications officer, on a Tuesday earnings call. Subramaniam was asked by an analyst whether Amazon’s more aggressive “posturing” in package-delivery services makes FedEx rethink its interactions with Amazon as a customer or as potential competitor. “Amazon is a long-standing customers of ours,” Subramaniam responded. Though Amazon does deliver a “portion” of its packages on its own, “they still rely heavily” on the U.S. Postal Service, UPS and FedEx for delivery, he said. “No single customer represents more than 3 percent of our total revenue, and Amazon is far from being our largest customer.” FedEx derives “the vast majority” of its revenue from business-to-business services, said CEO Fred Smith. In other words, “85 percent-plus of our business has nothing to do with e-commerce,” said Smith. “So Amazon is a wonderful company and they certainly have revolutionized the e-commerce world,” but “we're not sure what Amazon is going to do one way or another,” he said. The FedEx overnight-delivery network "consists of thousands of facilities," he said. It “has been decades in the making,” and isn't at “great risk of being disrupted” by any new competitors, including Amazon, he said. Amazon representatives didn’t comment Wednesday.