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Amazon is teaming up with FedEx in a major move to speed up the delivery of large items to customers' homes.

The agreement comes just weeks after UPS, one of Amazon's longtime delivery partners, announced it would cut back on its work with the online retailer and lay off 20,000 employees, Reuters said.

The new deal, signed in February but confirmed Monday, allows FedEx to handle residential deliveries of select large packages for Amazon.

FedEx called it a "mutually beneficial, multi-year agreement." Amazon added that the deal gives them "cost favorability," according to an internal document seen by Business Insider.

While this is a big shift, Amazon says it isn't ending its partnership with UPS. Instead, FedEx will now be one of several third-party delivery partners, which already include UPS and the US Postal Service (USPS), along with Amazon's own delivery network.

This agreement marks a big change in the relationship between FedEx and Amazon.

The two companies stopped working together on residential deliveries back in 2019, when Amazon was building out its own delivery system. But with this new deal, it seems the companies are willing to work together again.

FedEx Stock Jumps 7% After Amazon Delivery Deal

The news gave FedEx a strong boost on Wall Street, with the company's stock jumping 7% on Monday—beating the rest of the market.

The timing of this deal is important. In January, UPS said it would cut the number of packages it delivers for Amazon by more than half by the end of 2026.

The company said it wanted to focus on fewer deliveries that make more money.

According to CNA, As part of that change, UPS also announced it would close 73 facilities and cut 20,000 jobs.

FedEx and UPS have been competing hard for delivery business over the past five years. Both have worked to win over customers, sometimes by taking clients from each other.

For Amazon, this new partnership helps ensure its customers still get fast and reliable service, especially for heavier and larger orders. And for FedEx, it brings in more business just as its main rival is pulling back.

With FedEx now back in the mix, Amazon continues to grow its delivery options while keeping costs in check. And for people waiting on a big package—like a couch or a TV—it could mean faster delivery right to their doorstep.

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