Amazon and FedEx signed a new multi-year partnership in February 2025, ending a six-year hiatus that started when FedEx terminated its shipping contracts with Amazon in 2019. The deal focuses on residential delivery of large packages—furniture, appliances, bulky electronics—items that don't fit well in Amazon's standard delivery vans.
FedEx is also back as an approved carrier for Amazon's Premium Shipping program. If you're an FBM or Seller Fulfilled Prime seller using Amazon Buy Shipping, FedEx is now a valid option alongside UPS, USPS, and regional carriers.
What this means for sellers:
The reunion doesn't change Amazon's broader logistics reality: Amazon Logistics now handles approximately two-thirds of U.S. package deliveries. Amazon built its own network of 110+ cargo planes, 1,000+ delivery stations, and 400,000+ drivers. The company spent over $90 billion on shipping in 2023 alone. FedEx is a partner again, but Amazon runs its own show.
In December 2019, Amazon announced that third-party sellers would no longer be allowed to use FedEx Ground for Prime shipments. The stated reason: FedEx Ground's on-time delivery rates had declined during the holiday season.
The numbers looked bad. ShipMatrix, a software provider that analyzes shipping data, reported that during the week after Black Friday 2019:
None of them hit Amazon's 97% standard.
But FedEx was the only carrier banned. UPS was also below the threshold. Amazon's own network was below its own KPI. Weather events had hit large parts of the U.S. in December. The selective enforcement raised questions.
The ban felt retaliatory. Earlier that year—August 2019—FedEx had ended its formal shipping relationship with Amazon. This included both inbound shipments to Amazon fulfillment centers and end-user customer orders, representing about 1.3% of total FedEx volume.
Both companies spun the breakup as their own decision. But industry observers knew FedEx had walked away. Amazon had been manipulating delivery orders sent to FedEx, keeping the efficient, dense urban routes in-house and brokering out expensive, sparse rural deliveries to FedEx, UPS, USPS, and regional carriers. FedEx decided the economics didn't work.
Then Amazon singled out FedEx for the December ban. It looked like payback.
Amazon dramatically expanded its Delivery Service Partner (DSP) program and Amazon Air cargo fleet during the COVID e-commerce surge. By 2021, Amazon was delivering more than half its own packages. By 2026, that number hit two-thirds. Amazon Logistics is now the largest last-mile delivery network in the U.S. by volume.
Amazon also launched Amazon Shipping, offering its own carrier service to sellers for inbound FBA shipments and FBM outbound orders. Amazon now competes directly with FedEx and UPS for sellers' shipping business.
Fred Smith, who founded FedEx and ran it for 51 years, retired as CEO in June 2022. Raj Subramaniam took over and launched a major transformation called "DRIVE," consolidating FedEx Express, Ground, and Services into a single operating company. The restructuring targeted $4 billion in cost savings.
In December 2024, FedEx announced it would spin off its freight truck division as a separate publicly traded company, creating two focused businesses: a parcel/express company and a standalone LTL freight operation.
UPS chose to deprioritize Amazon, which had been paying below-market rates. UPS focused on higher-margin customers instead. This created capacity pressure for Amazon and opened the door for FedEx to return.
Amazon needed large-package capacity. Its DSP vans are optimized for small parcels. FedEx needed volume after losing Amazon and watching UPS walk away from low-margin deals. Neither company sees the other as a pure competitor anymore. Amazon's moat is speed and density for small packages. FedEx's strength is its integrated air/ground network for heavier shipments. The overlap narrowed.
If you use Fulfillment by Amazon, none of this affects you. Amazon picks the carrier. You don't control it, and you don't need to.
If you fulfill orders yourself—FBM or Seller Fulfilled Prime—carrier selection is part of your workflow. FedEx is back as an approved option through Amazon Buy Shipping. Compare rates, delivery speeds, and reliability. Performance metrics are what Amazon cares about: on-time delivery percentage, valid tracking rate, late shipment rate.
The Amazon-FedEx saga is a reminder that carrier relationships can shift overnight. Bans happen. Contracts end. Rate structures change. If you're running FBM at scale, build redundancy into your shipping strategy. Have backup carriers configured. Test rates and service levels regularly.
Amazon offers its own shipping service for FBM sellers and inbound FBA shipments. It's baked into Seller Central, and it competes directly with FedEx, UPS, and USPS for your business. If you're comparing carrier options, include Amazon Shipping in the analysis.
Amazon has been reported to be planning a significant reduction in USPS volume by the end of 2026. If you're currently relying heavily on USPS for FBM shipments, keep an eye on this. The phasedown hasn't been officially confirmed, but industry reports suggest it's coming.
Yes, if you're using Seller Fulfilled Prime and shipping through Amazon Buy Shipping. FedEx is an approved carrier. For FBA orders, Amazon selects the carrier automatically—you don't choose.
Amazon cited declining on-time delivery rates for FedEx Ground during the 2019 holiday season. But the move also followed FedEx's decision to end its shipping contracts with Amazon earlier that year. Many saw it as retaliatory.
Amazon Logistics handles the majority of deliveries (about two-thirds of U.S. volume). Amazon also uses UPS, USPS (though volume is reportedly declining), FedEx (for large packages under the 2025 partnership), and regional carriers like OnTrac.
Yes. In February 2025, Amazon and FedEx signed a multi-year partnership for residential delivery of select large packages. FedEx is also back as an approved carrier for Amazon's Premium Shipping program.
Only if you fulfill orders yourself (FBM or SFP). FBA sellers aren't affected—Amazon handles carrier selection. For FBM/SFP, FedEx is now an approved option through Buy Shipping. Compare rates and performance, and make sure you're hitting Amazon's delivery standards.
Fred Smith said in 2018 that he didn't see Amazon as a direct competitor. By September 2019—shortly after the FedEx-Amazon breakup—his tune had changed. On an investor call, he said: "We basically compete in an ecosphere that's got five entities in it. There is UPS. There is DHL. There is a US Postal Service. And now, increasingly, there is Amazon. That's who we wake up every day trying to think about how we compete against."
Smith retired in 2022. Amazon kept building. FedEx restructured. And in 2025, they found a way to work together again, each focusing on what they do best.
For sellers, the lesson is simple: Amazon's logistics network is massive and mostly self-sufficient. If you're using FBA, Amazon handles it. If you're fulfilling yourself, you have carrier options—FedEx is back among them—but performance is what Amazon measures. Pick the carrier that helps you hit the metrics, and don't assume any relationship is permanent.
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