Post Peak, Amazon Removes Ban on FedEx Ground, Home for 3P Sellers

A month after prohibiting third-party sellers from using FedEx Ground and FedEx Home for Prime orders due to alleged on-time performance issues, Amazon is now saying they’re back on the nice list.

Amazon said the performance issues have been resolved to its satisfaction, allowing sellers who make up more than half of its marketplace sales to use them again. The company never imposed the same prohibition for non-Prime orders.

“This is good news for our mutual customers who have come to rely on the FedEx Ground offering,” a FedEx spokeswoman told the Wall Street Journal, adding the Ground network had average transit times of 2.4 days during peak season, with about 18% of packages delivered early.

Fresh data from delivery experience management provider Convey supports Amazon’s decision. According to Convey, FedEx Ground’s on-time performance was already up 4.7% in the first couple weeks of 2020, from 83.3% to 87.9%.

Rob Taylor, co-founder and CEO at Convey, said FedEx handled more volume than they originally projected in a shorter length of time, despite the Amazon wind down. “FedEx was able to rebound swiftly due significant investments in its network and moving to seven-day-a-week delivery in 2020,” Taylor said.

Amazon said customers had been complaining about late packages during the December rush, leading to its decision to impose the ban. The company sometimes extends the Prime subscription of unhappy customers to appease them, the WSJ said.

Overall, UPS and FedEx performed well this shorter peak season, Satish Jindel of Shipmatrix told Bloomberg. Total volume handled by both between Black Friday and New Year’s Eve was over 2.7 packages, up from 2.3 billion in 2018, Jindel said.

For the period, FedEx delivered 94.6% of its packages on time, down from 2018, according to ShipMatrix data, while UPS hit the mark 96.6% of the time.

“The peak is behind FedEx and the weather has improved, so Amazon is comfortable that FedEx can perform to their standards again,” said parcel shipping consultant Jerry Hempstead. “FedEx had a lot of excuses and they took a lot of exceptions and in my opinion deluded themselves as to what the real service was in the eyes of the recipient.”

Thomas Anderson, a partner and executive vice president with shipping consultants LJM Group, said Amazon’s surprise decision to prohibit third-party sellers from using FedEx Ground and Home for Prime orders in the heat of peak season “created panic for some of our clients, so I can imagine that there was quite a bit of pushback.”

“My belief is that it was primarily driven by the lack of positive relationship between Amazon and FedEx, rather than supported by lack of service performance,” Anderson added.