Amazon has lifted its ban on FedEx Ground and Home shipping services after initially prohibiting its third-party Marketplace sellers from using the company over the holiday season. The news means Marketplace sellers will be able to use the potentially cheaper options from FedEx over Amazon’s own shipping platform and UPS starting today, January 14th, at 5PM ET, according to a notice sent out by Amazon. The news was reported on Tuesday by CNBC, and Amazon confirmed to The Verge that it did indeed send the email out today announcing the lifting of the ban.
Amazon first imposed a ban on FedEx Ground and Home services last month, citing FedEx’s “delivery performance” and its concern for quality control with regards to package delivery during the high-volume holiday season. There was concern at the time from some small business owners that the ban would disproportionately affect more cost-conscious sellers who relied on FedEx’s cheaper options to still qualify for Prime, as the Prime label greatly improves product visibility and placement in Amazon search results and on category landing pages.
Amazon and FedEx are in a heated competition over package delivery
Amazon said the ban would be temporary, but it was also demanding sellers either switch to UPS or another provided shipping option to qualify for Prime or pay out of pocket for FedEx Express. Alternatively, sellers could remove Prime labels from their products and offer FedEx Ground or Home as an optional paid shipping option. According to CNBC, Amazon says it is once again content with FedEx’s delivery performance, so it’s lifting the ban today.
Amazon and FedEx no longer work together after FedEx first declined to renew its FedEx Express contract with Amazon for air shipments in June and then ended its ground shipping contract two months later. Amazon now relies on a mix of UPS and its own Flex delivery platform that’s modeled like Uber as well as a series of third-party contractors. Although, until the initial FedEx ban, Amazon allowed its Marketplace sellers to use FedEx services.
Amazon has spent billions of dollars over the last decade to build out its own delivery infrastructure as a way to eventually reduce costs it incurs by relying on third-party companies. In its last quarter, Amazon spent $9.6 billion on fulfillment, in part to support one-day Prime shipping. The company is now approaching the total package volume of both FedEx and UPS in the US and is on pace to surpass both.