(This story has been corrected to remove reference to Amazon ( AMZN ) in paragraph 6)

(Reuters) -Amazon ( AMZN ) said on Monday it has struck a new partnership with FedEx ( FDX ) in late February to handle some parts of its package deliveries.

FedEx ( FDX ) shares rose 1.7% after the closing bell.

Business Insider first reported the news on Monday, citing an internal document. The deal with rival FedEx ( FDX ) gives Amazon ( AMZN ) "cost favorability" compared to UPS, the report said.

UPS said in January that it plans to shrink shipment volumes for Amazon ( AMZN ), its largest customer, by more than 50% by the second half of 2026. This is a part of the delivery firm's plan to focus on fewer, but more profitable deliveries.

Late last month, UPS said it would slash 20,000 jobs and shut 73 facilities as a part of its planned reduction in deliveries for Amazon ( AMZN ).

FedEx ( FDX ) did not immediately respond to Reuters' requests for comment.