In the latest in a series of power moves, Amazon lifted the FedEx ban that went into effect over the holiday shipping season. The recent ban restricted third-party sellers from using FedEx’s Ground and Home Delivery services for Amazon Prime deliveries.
Amazon blamed FedEx’s poor delivery performance, saying that they suspended Prime shipping to ensure Amazon could make the cutoff date for holiday shipping orders.
Sellers were left scrambling when the ban went into effect on December 18th. Many had to spend more money on shipping to meet their own delivery commitments and get customers their packages by Christmas.
However, Amazon didn’t take away all FedEx shipping options. Sellers were still allowed to use FedEx’s Express shipping service for Prime orders (often at much higher costs), or FedEx’s Ground and Home Delivery services for standard orders.
In response to the ban lift, a FedEx spokesperson told CNBC that FedEx’s service levels during the peak holiday season had an average transit time of 2.4 days for ground packages and that 18% of ground packages were delivered early.
While Amazon and FedEx have already cut direct ties, Amazon third-party sellers account for 58% of merchandise sold on Amazon. Shutting down this service during the busiest shipping time of the year sent a message to their one-time partner, and soon-to-be competitor.
A History of the FedEx and Amazon Rivalry
Amazon’s abrupt ban is just an escalation in a long-standing rivalry between the two companies. Amazon has been investing heavily in infrastructure and technology to handle the majority of their own shipping needs, and reduce their reliance on FedEx, UPS, and the US Postal Service.
Meanwhile, FedEx has recognized Amazon as a competitor, and has pivoted toward working with a broader ecommerce market.
Take a look at this rough timeline of recent events between the two companies:
- February – Amazon’s annual SEC filing lists “transportation and logistics services” as an area that they compete in.
- May – Amazon breaks ground on Kentucky air hub to expand their shipping fleet and further reduce reliance on outside delivery services. They expect the hub to open in 2021.
- June – Amazon introduces a new delivery drone to assist with last-mile delivery for small packages.
- June – Amazon announces its Delivery Service Partners program, which offers entrepreneurs the chance to lease and operate up to 40 delivery vans to help with last-mile deliveries.
- June – FedEx chooses not to renew their express U.S. shipping contract with Amazon, saying they wish to reach a broader ecommerce market.
- August – FedEx announces the termination of their ground delivery contract with Amazon.
- December 15 – Amazon temporarily blocks third-party sellers from using FedEx’s Ground and Home Delivery services for Prime orders.
- January 14 – Amazon lifts the FedEx ban and lets third-party sellers resume ground services with FedEx.
Moving forward, FedEx no longer makes any U.S. deliveries for Amazon directly, but third-party sellers are free once again able to use the shipping company’s services.
Your Next Steps
Now that you’re able to use FedEx for any type of Amazon shipments, it’s time for a quick refresher on your rights as a shipper.
Delivery times aren’t merely suggestions—they’re promises. When FedEx or other carriers deliver your packages late, then you’re entitled to a full refund. But the carriers don’t make it easy.
There won’t be any automatic refunds, account credits, or notifications from the carrier. To guarantee you don’t miss out on refunds, then make sure that you’re consistently doing the following:
- Review your agreements
- Audit your invoices
- Submit your disputes
It’s time-consuming to stay on top of high-volume shipping accounts to ensure that you receive refunds that you’re entitled to, but not doing so costs you money.
Our platform can help you automate these refund requests to help save you money without costing you time.
Reach out today to talk to one of our shipping experts.