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Statement Regarding FedEx’s Relationship with Amazon
- hhs 7y agoThis title is a bit misleading. FedEx is only dropping their Express business. As cited in the link, they note, “FedEx has made the strategic decision to not renew the FedEx Express U.S. domestic contract with Amazon.com, Inc. as we focus on serving the broader e-commerce market. This decision does not impact any existing contracts between Amazon.com and other FedEx business units or relating to international services.”
- Johnny555 7y agoThat doesn't really clarify anything (for me)... What are the other business units? I've never gotten a Fedex Home Delivery pacakge from Amazon, are there other Fedex business units that ship for AWS?
- tyingq 7y agoFedEx Ground is a completely separate business from FedEx Express/Air. Different trucks for the last mile(s), even. Likely their bulk freight unit is also separate.
- millisecond 7y agoBoggles my mind why they’d have different last mile trucks. How could that be better?
- tyingq 7y agoNo idea. UPS doesn't work that way. As a small biz, I went with UPS because I didn't want to deal with separate air and ground pickups.
- rossdavidh 7y agoDepends on how much time/trouble it would be to consolidate in time for that last mile. You could expend more effort combining things, than you would save in just doing the last mile in separate trucks. I'm not saying this IS true, I don't know. Just that it is logically possible. Combining two different systems for a last mile delivery is not trivial.
- JaimeThompson 7y agoIt might make it easier to deal with FedEx packages that have to be delivered really early, early, and the like.
- wnissen 7y agoThe sorting centers are completely different, since the methods of backbone transit are separate. Express only goes via airports (except for regional city pairs like L.A. to San Francisco). Home/Ground only goes by road/train, so you'd have to consolidate somewhere in between. Also, a significant fraction of the Express traffic is stuff that is time-sensitive delivery. Things like getting signed paperwork so people can buy houses. They really hate delays. In fact, if you spring for the "priority overnight" they'll send a driver to your door with a blank waybill and envelope, and wait while you fill it out. It's quite a different service than Ground/Home.
- Spooky23 7y ago"Green" FedEx is ground, which was an acquisition a long time ago. It's an all-ground service that uses trains and contract delivery carriers with FedEx livery. Slow and cheap. If you look at the door of the truck it will tell you who owns it. The "Red" one is Fedex Express -- overnight, 2-day and 3-day service. Most people think of "Express" FedEx.
- LyndsySimon 7y agoFreight is red. Express is orange. I worked for Freight for seven years. FedEx Freight red is #FF0033 :)
- bdcravens 7y agoI imagine Express is where Amazon was leaning the hardest on Fedex, to avoid losing too much blood on each Prime shipment.
- dang 7y agoOk, we've changed the title back to what the page says. Submitted title was "Fedex drops Amazon".
- nutjob2 7y agoHmm... how often does a company fire a big customer? This would seem significant and probably related to either a pricing dispute or the fact that one way or another Amazon is encroaching on FedEx's core business.
- delfinom 7y agoIt's just FedEx is not renewing a shipping contract. Amazon could still ship using FedEx at retail/non contract rates.
- sokoloff 7y agoGiven the depth of discounts for even 1 million parcels per year, it’s a safe bet the Amazon won’t be paying Fedex retail rates for any non-trivial number of customer orders.
- gist 7y agoExactly. Fedex sees the writing on the wall and figures it might as well wring the last cent of profit out of the relationship (and who knows what profit was on it with the contract). In other words if they feel that Amazon will cut them out then what is the motivation to serve them at discount rates? In a way this is similar to a commercial landlord with a tenant that wants to go on month to month. You take advantage of the opportunity and charge more rent for the accommodation. Zero reason for Fedex to not do what is in their strategic interest here it's business.
- petra 7y agoIt's close to Amazon's 1-day shipping announcement. At least for some products, probably, Fedex Express was needed to achieve 1-day shipping. And Walmart does have many more local warehouses.
- treis 7y agoI think this is more a "You can't fire me, I quit" kind of thing. I'm guessing Fedex wasn't willing to make the concessions Amazon wanted. Better to have the news story be FedEx drops Amazon than vice versa.
- dubcanada 7y agoI don't think I've ever gotten a Fedex package from Amazon. It's all via CanadaPost and I assume US is USPS or UPS?
- Johnny555 7y agoI used to get around 25% of my Amazon packages from Fedex, now most come from Amazon's own delivery service, the rest either come from the USPS or UPS (or sometimes both - UPS delivers to the postoffice and the mailman delivers to my house)
- jamesmp98 7y agoI actually like Amazon deliveries. They leave the packages at the door (in this case I'm ok with) and send a picture of said delivery, verifying that they did indeed leave it at and not in the apartment main office (which is conveniently only open while I'm at work)
- Johnny555 7y agoAs a recipient, I like them - as a pedestrian and cyclist I don't, their drivers are horrible drivers, driving too close to cyclists, cutting off pedestrians on sidewalks, etc.I assume it's because they are under a lot of time pressure to make deliveries. UPS drivers, despite the large trucks, seem to be much safer drivers.
- gautamdivgi 7y agoI agree. There has been the odd fedex package but extremely rare. It's usps, ups and most recently amazon delivery itself.
- rtkwe 7y agoIt's a mix they use UPS, USPS, Fedex and now their own trucks/contractors vehicles all depending on which is cheapest at the moment. I do anecdotally get much more from all the others than from Fedex.
- sdinsn 7y ago
- kevan 7y agoThe press release isn't very clear about exactly which contract isn't being renewed. Other news sources[1] indicate that it's specifically the air delivery contract. Not exactly a surprise with events like this[2] in recent memory. [1] https://www.bloomberg.com/news/articles/2019-06-07/fedex-says-it-won-t-renew-amazon-s-u-s-air-delivery-contracts https://www.bloomberg.com/news/articles/2019-06-07/fedex-say... [2] https://www.marketwatch.com/story/jeff-bezos-breaks-ground-on-15-billion-amazon-air-hub-near-cincinnati-2019-05-14 https://www.marketwatch.com/story/jeff-bezos-breaks-ground-o...
- toomuchtodo 7y agoIf I was FedEx, I too would dump Amazon and let some other sucker deal with their race to the bottom demands. Having no pricing power as a vendor is a fool’s errand, and Amazon will steamroll you.
- noncoml 7y agoLately I have observed that UPS has given up trying to re-deliver my packages if they don’t find me at home on their first try. They instead ask me to go pick them up from a UPS storage location. I wonder if this is another sign of carriers getting fed up with Amazon.
- sokoloff 7y agoMore likely Amazon not willing to pay for the redelivery attempt for the parcel. (Carrier contracts and line-item fees are quite negotiable, even way below Amazon’s scale.)
- cbhl 7y agoNot doing retries is a cost thing -- last mile is expensive (human drivers, fewer packages) and retrying delivery multiplies that cost 2x, 3x or more. Bufferbox (YC Summer 2012) was trying to reduce this cost before Google Shopping acquired and shut them down.
- alistairSH 7y agoUSPS does the same thing for me. Pretty annoying. That said, whoever does the last-mile delivery in the Amazon-branded vans seems to do a good enough job for my easy-to-find house. And they tend to deliver in the evening, when I'm home, so the package isn't sitting out all day (though I'm sure this is a quirk of my location and the driver's route, not a feature).
- howard941 7y agoI've found USPS service to my residence is fantastic when it's my regular letter carrier but I do give a $100 tip every year. Nothing fits in my tiny street mailbox (thanks HOA, I had a nice big box at one time) but she walks parcels to my door even if it's pouring buckets.
- fancyfish 7y agoI got fed up with this since it was happening for about half my deliveries. I ask for a refund and let them return to sender after the package is done sitting at the storage location.
- nacs 7y agoOf all the shippers, I've found Fedex to be the most unreliable. UPS deliveries via Amazon seem to always arrive without issue but almost every Fedex package gets lost en route or is delayed. Always felt like Amazon should drop Fedex.
- notyourwork 7y agoMy experience has been the same, FedEx is always a crap shoot. USPS and UPS are always much more reliable.
- sokoloff 7y agoFor me Fedex was pretty good, straight UPS quite good, and UPS Mail Innovations (with USPS last mile) was a reliable way to get a package a day late, meaning chasing Amazon CARE for a credit that was usually worth more than the inconvenience of the packaging missing Amazon’s guaranteed delivery SLA.
- czk 7y agoThe only way I can get my FedEx packages is if I re-route them to a Walgreens or another drop point and drive there and pick them up myself. They never seem to be able to find my address while UPS or USPS never has an issue.
- bluetidepro 7y agoI think it all depends on the context of where you live, personally. I've lived in multiple large cities in the midwest (USA), and can say that UPS was far superior in one of them, while Fedex was way better in another. Even different addresses in the same city had the same result. Doesn't seem like there is any rhyme or reason.
- MegaButts 7y agoIt's probably specific to the drivers, not the companies.
- EB66 7y ago
- blinkingled 7y agoMight just be a contact negotiations fail - Amazon given their options might not be too keen on paying what FedEx demands and FedEx thought it would be beneficial to disclose first and control the narrative.
- mieseratte 7y agoAlternatively put, FedEx might not be willing to grovel for what Amazon is offering. Many moons ago I'd worked for some folks who'd sold a business to Amazon. I'd heard it said that the only relationship you want to be in with Amazon is as a customer, anything else and they will chew you up and spit you out in the most brutal fashion. I wouldn't be surprised to hear that Amazon was lowballing FedEx to an obscene degree, especially given that Amazon is rolling out their own delivery operations.
- ocdtrekkie 7y agoI noticed FedEx seems very well partnered with Walmart right now: FedEx stores are now eligible pickup locations for the free store pickup option at Walmart.com. This was pretty handy because getting in and out of busy Walmart's is a pain, and most FedEx stores are basically deserted at any given time. Even when picking up at Walmart stores, I believe they were in FedEx packages. And this would be that two-day express shipping speed.
- joshmn 7y agoThey have a partnership with Walgreens as well. Not sure the capacity but I have seen signs signaling that you can drop off FedEx returns to Walgreens.
- kevin_thibedeau 7y ago> getting in and out of busy Walmart's is a pain In the 80's Walton had a hard policy of no more than three customers waiting in a line. Shopping then was a far more pleasant experience.
- colechristensen 7y agoDelivery sucks. Vendors can't find me because my address is half a block away from my actual unit. When they do find it, they pick one of two mail rooms, inside a random exterior door, in front of my door, or at the front desk. The front desk is often not staffed and closes earlier than deliveries are out. The front desk occasionally forgets to notify me a package arrived. The delivery "lockers" sometimes don't email me. The architecture and management of a building is very important for delivery success. It needs to be a "business address", it needs to be faithfully staffed, there needs to be delivery-only parking, and it needs to be obvious where a deliverer must go. I have lived in places where this was done right, and several places where it was done wrong to my intense dissatisfaction.
- CydeWeys 7y agoWell, it sounds like delivery sucks for your particular situation, at least. I have no problems whatsoever with delivery, either to work or to home. Home deliveries even manage to find the front of my door on the sixth floor of my apartment building, somehow.
- amyjess 7y agoOne time I got really fed up with FedEx because when they delivered a package to me while I wasn't home, they dropped it off at the leasing office instead of taking it to the FedEx facility. The leasing office closes at 6pm. The FedEx facility is only a few blocks away and closes at either 8 or 9. I got home at 6:30. Because of that driver's incompetence, I had to wait until the next day to get my package _and_ be late to work the next day because the leasing office doesn't open till 10am. And this was something that was really time-sensitive, too. This wasn't the first time they screwed up a delivery to me either. I will never do business with them again if I can help it.
- dv_dt 7y agoIsn't there a way to register your address with general delivery directives?
- 7y ago
- e0m 7y ago"Amazon.com represented less than 1.3 percent of total FedEx revenue for the 12-month period ended December 31, 2018"
- cabaalis 7y agoI do this myself, so I wonder if when humans are trying to minimize impact when communicating bad news, we pick language intended to diminish. Why say "LESS THAN 1.3 percent" instead of just saying something like "1.28 percent?" You're already giving decimal-level precision. Why does "less than 1.3 percent" sound better for news like this than "over 1 percent?"
- axaxs 7y agoFor the reasons you mentioned, I assumed that to meant some decimal between 1.2 and 1.3 percent. And rounding the the tenths is more than enough. I didn't quite take that to mean anything sinister, though I'd have probably worded it something like 'just under 1.3 percent' to express that, if for the reason above.
- duxup 7y agoLocally I've gotten a lot more shipments delivered by Amazon delivery people. They like to leave my packages in the driveway close-ish to the garage door rather than near the front door. Not an ideal place.... Packages tend to be a lot more beat up too for some reason.
- fhood 7y agoThat has been happening to me as well. I don't mind it being less visible from the road, but there isn't any shelter from the rain by my garage.
- duxup 7y agoYeah I've had straight up soaked through packages lately.
- dx87 7y agoThey bring mine to the door, but half the time they reek so badly of cigarette smoke that I can't take the box inside because it'll stink up the house.
- ComputerGuru 7y agoAmazon punishes drivers if the packages are lost or stolen so they try to hide them.
- duxup 7y agoIt's actually more exposed in my driveway ... could be run over, or rained on. It's not likely to be stolen in my neighborhood, but they're not helping.
- sailfast 7y agoAmazon just started sending me pictures of the package on my porch as part of delivery confirmation. Not sure I love this, tbh, but if many things had been stolen I guess I’s appreciate it more.
- jjellyy 7y agoGood !! Fedex is the only carrier that fucks up my deliveries !
- myroon5 7y ago"As previously disclosed, Amazon.com is not FedEx’s largest customer." Curious who their biggest customers are
- ceejayoz 7y agoOddly enough, the USPS (which doesn't have their own fleet of aircraft) is the largest. https://about.usps.com/news/statements/022317.htm https://about.usps.com/news/statements/022317.htm
- jmathai 7y agoInteresting. That statement says FedEx is USPS' largest provider of air transportation to the USPS. But that's different from USPS being FedEx's largest customer.
- andrewfong 7y agoGood for Amazon. FedEx is terrible. Mini-rant: Ordered stuff online. FedEx says the package was delivered but I don’t see it. The online tracker lists the last location of the package in the city where I used to live. I assume I autofilled the wrong address or something. So I head down to my old apartment complex. They have my package. NBD, I’m able to pick it up without incident. But then I check the shipping label on the package. It actually has my current address on it. And right below that is a “Corrected Address” label, with my old address. I double-check the online order. Turns out I gave them the right address. The retailer doesn't have any knowledge of my old address. I call FedEx and ask what’s up. Turns out the sender gave them my phone number (presumably so they could call me if they had issues delivering — and indeed, my phone number is listed on the “Corrected Address” label, along with an alterante phone number I did not give to the sender). The CSR confirms that FedEx disregarded the address provided and “corrected” it to the address they previously associated with name + phone number. The CSR confirms that no, this was not something I signed up for or accidentally opted into. They just “correct” addresses automatically without asking. Even if the corrected address is in a completely different city and looks nothing like the given address. Because quality. So apparently, everytime I move, I now have to let FedEx know where or else they’ll perpetually misdeliver my stuff. Lovely. And heaven forbid I try to send packages to my parent’s address or some other place that’s not the address FedEx currently has on file for me. Because just shipping packages to the address actually on the damn label is too damn hard for them.
- deleted 7y ago[deleted]
- amelius 7y ago> FedEx has already built out the network and capacity to serve thousands of retailers in the e-commerce space. Why don't they build an e-commerce portal with third party merchants, just like Amazon?
- bdcravens 7y agoMy take: Amazon was twisting Fedex's arm on Express to limit shipping costs related to Prime. Fedex had enough. My take: Amazon will expand their logistics operation (whether internally or via acquisition)
- bitxbit 7y agoTo this day, I don’t understand why Wal-mart didn’t buy UPS a decade ago.
- metalliqaz 7y agoI've never found FedEx to be as good to my door as UPS, but I lament what has happened to Amazon shipping. Where professionals used to deliver my packets, now amateurs show up in SUVs or rented box trucks. They leave the packages exposed to passers-by. They get their stupid trucks stuck in my driveway, ripping up the yard in the process. They lose packages in transit. Free one-day shipping with prime isn't worth this hassle.
- Twirrim 7y agoI live on a private street. Amazon's "Amateur Delivery Drivers as a Service" routinely fails to find the private street, resulting in delays on packages arriving, and on numerous occasions, I have to go walk down to the end of my street to get the package from their driver.
- aianus 7y agoAs a counter-anecdote, Canada Post and UPS don't even try to deliver my packages to my apartment door but the Amazon guy gets it right every time.
- metalliqaz 7y agoWhere do they deliver it instead?
- aianus 7y agoTo a post office ~2km from my home. I drive there and pick it up with my driver's license.
- profmonocle 7y agoAmazon's delivery service is a nightmare if you have an even remotely unusual situation. Packages to my apartment are supposed to go to the main office a block away, since there's no way for delivery drivers to get into the building. UPS, USPS, and FedEx are all aware of this and get it right every time. Amazon's drivers have never gotten it right. They either mark it as undeliverable or worse, leave the package right outside the entrance, on a busy street. I contacted them several times but it didn't help, so I gave up and started having my orders shipped to work. (They're not great there either - it's a coin toss whether they'll actually bring the package to our suite or leave it in the lobby.) There's a real benefit to having regular drivers with regular routes - the drivers eventually learn these types of quirks.
- jshaqaw 7y agoIt’s a smart business move for FedEx to be the key scale logistics infrastructure for everyone not Amazon rather than be reduced to a dumb pipe for Amazon - a scenario where they would get squeezed by the monopsony buyer over time. I bet Amazon had terms and conditions which limited FedEx’s ability to go after both of these markets.
- bstar77 7y agoThe writing is on the wall, Amazon is going to be shipping everything themselves sooner than later. I think this just so that FedEx can focus on more profitable long term opportunities.
- chaosprophet 7y agoThey already do this for a large portion of Prime deliveries in India. Don't see why they wouldn't expand it to other countries.
- cdbyr 7y agoI wouldn't be surprised if this came of amazon lowballing because they want to get (more) into Fedex's game. The cost of shipping for Amazon isn't just the shipping cost - it's the opportunity cost of not scaling their own shipping business. I bet that's priced into their bid. Similar goes for FedEx. If you're FexEx, you don't want more Amazon competition. You also like the scale/efficiencies from the Amazon business. So that puts their value of the deal at $$$_from_amazon + scale_efficiencies + amazon_not_in_your_game. (I don't know what the marginal benefits of scale look like at that level - anyone know more on this?) I could see FedEx better off taking a loss to keep the deal going. I bet either Amazon just tried to make that happen, or it's been happening for a while and there was just a change-over at Fedex.
- heroHACK17 7y ago'There is significant demand and opportunity for growth in e-commerce which is expected to grow from 50 million to 100 million packages a day in the U.S. by 2026.' This expectation, if true, is mind boggling.
- wnissen 7y agoYeah, that seems crazy. There are ~125 million U.S. households. We buy a ton of stuff from Amazon (not toilet paper, to be sure) and that's ~100 orders (so even fewer packages) per year. The average household is going to get an Amazon / Walmart / Costco package every single day?
- Postosuchus 7y agoPersonally, I hate FedEx with passion! They are the most unreliable, the most clueless and most difficult to work with. UPS never has an issue leaving packages by the door, whereas FedEx would always record a failed attempt to deliver. Last year I had a nightmare situation, where a case of wine was being shipped via FedEx and they "made an attempt" twice without bothering to leave a notice!!! (I suspect they weren't even at the right building). I ended up escalating it up the chain significantly to get it resolved but I swore to never ever ship anything by them.
- alfalfasprout 7y agoDepends where you live. I have the complete opposite experience in San Francisco. UPS has lost packages left and right while Fedex is always on time and super reliable.