Amazon hired FedEx to handle some of its large package deliveries, according to an internal document obtained by Business Insider, following UPS' decision in January to reduce the amount of Amazon volume it delivers by more than 50% by the second half of 2026.
The multi-year agreement covers residential delivery of large packages for Amazon and gives the retailer “cost favorability” compared to its contract with UPS. However the document did not specify exact parameters of the deal or which Amazon packages would be handled by FedEx.
Amazon says that the agreement will not replace UPS, but rather, FedEx will join its third-party partners.
An Amazon spokesperson said:
“We've reached an agreement with FedEx to serve as one of several third-party partners to deliver packages to our customers. FedEx joins our other third-party partners like UPS and the USPS, that work alongside our own last mile delivery network to help us balance capacity to best serve customers.”
A FedEx spokesperson said:
“FedEx has the global network, capacity, and expertise to serve the shipping needs of thousands of retailers in the e-commerce space. We have reached a mutually beneficial, multi-year agreement to provide residential delivery of select large packages for Amazon.”
FedEx also said that the new deal will be “net positive” for FedEx's average system yields, which is an industry metric that measures the efficiency and profitability of a shipping network.
Amazon and FedEx cut residential delivery ties in 2019 as Amazon was building its own competing delivery network. The two companies have since been in a battle for market share during the last five years, often poaching whole or partial customer accounts from each other. The logistics consulting firm MWPVL estimates that FedEx handles no Amazon packages at this point in the US, not including third-party sellers.