Insight / Blog

Amazon cuts FedEx off Prime services


Posted on 8th January 2020

In the midst of peak, as record parcel volumes came through carriers, Amazon made waves by blocking third party merchants’ use of FedEx Ground and Home to make deliveries to Prime shoppers. 

In reality, though, the change was not a huge surprise. Fedex poked the bear in August 2019, by saying that it would not renew its contract to deliver for Amazon. This was driven by the increasing prevalence of Amazon as an outright competitor in ecommerce logistics, creating its own huge network of parcel capacity by outsourcing last-mile deliveries to its cohort of “Delivery Service Partners” which use Amazon branded vehicles and run according to Amazon’s strict rules and oversight.

However, for Amazon to make this policy change in mid-December was surprising to analysts, who wondered whether the move was an attempt to “gain market share by hurting the leading competitors”, in the words of Bob Amster of the Retail Technology Group.

Regardless of the precise reasoning, it’s clear that Amazon felt compelled to act quickly rather than wait for a quieter period to make the change. The fact that it was comfortable doing so shows the scale and capacity it has reached in its delivery operations and the influence it is now wielding in the space.


Related articles

5th January 2023

5 changes we predict in ecommerce delivery & returns 2023

We check last year's predictions and forecast more changes in the first and last mile for 2023.

Read more

2nd November 2022

Q4 product release highlights – flexibility, C2C and more

These are the new product features and changes we've added in the last quarter.

Read more

27th October 2022

How to change consumer behaviour: We talk to Royal Mail, CTT and Delivering London

We spoke to industry leaders about consumer behaviour, convenience and sustainability.

Read more

Sign up for our newsletter to stay on top of the latest industry trends, challenges and solutions.

Required

You're on our global site.

Continue

Switch the country

Japan United States