Why Shares of FedEx Are Up Today
Shares of FedEx (NYSE: FDX) were up more than 6% on Wednesday morning on reports that Amazon.com (NASDAQ: AMZN) is at least temporarily scaling back its shipping ambitions. FedEx shares were punished in 2019 in part because of the threat of new competition from the e-commerce giant, and investors are cheering the reprieve.
FedEx and Amazon went through a very public breakup last year, with the former FedEx customer transitioning to become a rival. Late in the year, Amazon limited the ability of third-party merchants to ship with FedEx, pushing more business toward its internal service.
The Wall Street Journal reported late Tuesday that Amazon was suspending its service delivering non-Amazon packages as it reevaluates the offering. The decision comes as Amazon is devoting more resources to delivering needed goods during the COVID-19 pandemic. But reading between the lines, it appears that Amazon's trials have found the service hard to operate cost-effectively.
Source Fool.com
