Amazon-FedEx Standoff Comes To An End

Amazon-FedEx Standoff Comes To An End

Amazon has lifted its ban on FedEx Ground as a shipping option for third-party merchants, according to a report by The Wall Street Journal.

On Tuesday (Jan. 14), Amazon notified merchants that they could resume use of the FedEx Ground network to place orders through Amazon Prime. The shipping provider was banned right before Christmas and for a few weeks afterward.

According to Amazon, the ban was enacted because FedEx Ground wasn’t meeting deadlines for Prime deliveries, which are often guaranteed in one or two days. When FedEx would miss deadlines, it would trigger complaints and sometimes force Amazon to extend a customer’s Amazon Prime subscription to make up for the late delivery.

A spokesperson said that FedEx Home and Ground were unblocked because FedEx has shown that it can meet Amazon’s shipping requirements.

One of the main reasons for the long delay between the ban and the restoration is that Amazon looked at FedEx’s performance over a weeklong rolling window, and FedEx had to deal with some disruptions in early January during an exceedingly busy return period.

“This is good news for our mutual customers who have come to rely on the FedEx Ground offering,” a FedEx spokeswoman said. She added that during peak shipping season, the company's ground unit did well, with an average package travel time of 2.4 days and 18 percent being delivered early.

Amazon stopped using FedEx last year for its own shipping contracts, which cost FedEx $900 million in revenue. Amazon still allowed it for third parties before the ban; those sellers account for about 60 percent of all products sold on the site.

Merchants were forced to use other options for shipping, including higher-priced FedEx air delivery or the United Parcel Service (UPS). Amazon said that using FedEx Ground for non-Prime orders was always fine.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.