FedEx and Amazon Explored Partnership in eCommerce Returns Last Year

FedEx and Amazon reportedly engaged in discussions last year about a potential partnership to handle the increasing volume of eCommerce returns.

Although no deal was reached, the talks underscore the shifting dynamics in the parcel delivery industry, The Wall Street Journal (WSJ) reported Monday (March 18).

The discussions revolved around FedEx accepting Amazon returns at its retail locations, according to the report. The move would have allowed FedEx to tap into Amazon’s return business, which is currently managed by various companies, including FedEx competitor UPS.

The talks took place around the same time Amazon introduced a fee for customers returning packages at UPS stores last spring, the report said. In the fall, UPS acquired Happy Returns, a company specializing in online retailer returns, expanding its network of return drop-off sites and reducing its exposure to Amazon’s return business.

FedEx and Amazon’s relationship has been tense since 2019 when FedEx ended its delivery contracts with Amazon, viewing Amazon’s development of its own delivery capabilities as a threat, per the report. However, Amazon’s investments in its logistics network have paid off, surpassing both UPS and FedEx to become the largest parcel carrier in the U.S.

The potential partnership with Amazon could have provided FedEx an opportunity to boost its parcel volumes during the industry slump that has followed the world’s recovery from the pandemic, according to the report. As FedEx prepares to release its quarterly earnings report Thursday (March 21), the company is grappling with the challenge of adapting to changing market dynamics, implementing measures such as combining its air and ground networks and furloughing workers.

PYMNTS Intelligence found that 33.4% of American consumers consider free online returns to be very or extremely important. “Free online returns” means retailers provide no-cost online returns with printable shipping labels, according to the PYMNTS Intelligence report “2023 Global Digital Shopping Index: U.S. Edition.”

In another development in the space, returns management platform Loop introduced new services for merchants and logistics providers in February. The new offerings help logistics partners share enriched data between Loop and merchant warehouses and allow brands to ship and move their returns more efficiently.

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