
Statement Regarding FedEx’s Relationship with Amazon - 6d6b73
http://investors.fedex.com/news-and-events/investor-news/news-release-details/2019/Statement-Regarding-FedEx-Corporations-Relationship-with-Amazoncom-Inc-/default.aspx
======
metalliqaz
I'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
I 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
As 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
Where do they deliver it instead?

~~~
aianus
To a post office ~2km from my home. I drive there and pick it up with my
driver's license.

------
cdbyr
I 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.

------
kevan
The 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-
say...](https://www.bloomberg.com/news/articles/2019-06-07/fedex-says-it-won-
t-renew-amazon-s-u-s-air-delivery-contracts) [2]
[https://www.marketwatch.com/story/jeff-bezos-breaks-
ground-o...](https://www.marketwatch.com/story/jeff-bezos-breaks-ground-
on-15-billion-amazon-air-hub-near-cincinnati-2019-05-14)

~~~
toomuchtodo
If 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.

------
hhs
This 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
That 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?

~~~
Spooky23
"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
Freight is red. Express is orange.

I worked for Freight for seven years. FedEx Freight red is #FF0033 :)

------
nacs
Of 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.

~~~
PascLeRasc
My younger brother is a professional musician, and last year he bought a
boutique trombone case handmade by one guy in a cabin in Wisconsin, after over
a year on the waiting list. Fedex got to his apartment building in Manhattan,
realized they didn't have a code to get in, and left it on the sidewalk. My
brother was waiting at home all day for this package, saw them drop it off,
ran down, and it was gone when he got outside. Fedex wouldn't do anything
about it, no refund, nothing. And if he had done a chargeback on the
manufacturer, who wasn't really at fault, he wouldn't have been able to buy
from him ever again.

So I wouldn't choose Fedex for anything valuable.

~~~
fooey
Anything that expensive or irreplaceable should have been insured by the
shipper and required a signature

If you don't get what you buy, it's absolutely on the seller to make it right.
It's on them to get reimbursed by the shipper for a failed delivery.

~~~
benatkin
Insurance is not a panacea. It wouldn't have gotten him moved up in the
waiting list to receive a replacement quicker, and the claim likely would have
been denied, and they'd have expected him to go through an appeals, which
would be a pain, and might not get the result he wanted. A police report will
probably be required. Even if successful, when insurance claims are made they
often go to the CLUE insurance report, and make many forms of insurance more
expensive or harder to get. [https://www.carinsurance.com/clue-
report.aspx](https://www.carinsurance.com/clue-report.aspx)

The other thing is that you're assuming there was no insurance. Maybe you're
right but I doubt it, it was probably insured by Fedex and the uselessness of
the insurance was included in "Fedex wouldn't do anything about it".

The "requesting a signature" part is something they often neglect to do, or do
carelessly.

At any rate if the person making the trombone case can't be bothered to ship
it properly, it's still Fedex's fault from the musician brother's perspective,
because he knew firsthand that the driver failed to deliver the item directly
to him.

------
colechristensen
Delivery 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.

~~~
amyjess
One 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
Isn't there a way to register your address with general delivery directives?

~~~
Mindless2112
Yes, you can sign up for free for FedEx Delivery Manager and set delivery
instructions for your address. I don't know how effective it is though.

------
ocdtrekkie
I 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.

~~~
kevin_thibedeau
> 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.

------
bdcravens
My 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)

~~~
libria
My take: Mackenzie Bezos buys UPS - the only other big package shipper - and
wrings Amazon for a greater cut of profits

~~~
bdcravens
UPS is unionized, Fedex isn't. This will play a big role in any suitors.

------
nutjob2
Hmm... 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
It's just FedEx is not renewing a shipping contract. Amazon could still ship
using FedEx at retail/non contract rates.

~~~
sokoloff
Given 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.

------
myroon5
"As previously disclosed, Amazon.com is not FedEx’s largest customer."

Curious who their biggest customers are

~~~
ceejayoz
Oddly 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
Interesting. 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.

~~~
ceejayoz
I'm open to suggestions of a FedEx customer that'd have enough volume to bump
all of the USPS's air mail down to second place.

~~~
anchpop
Amazon?

~~~
ceejayoz
Scroll up.

"As previously disclosed, Amazon.com is not FedEx’s largest customer."

------
duxup
Locally 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.

~~~
ComputerGuru
Amazon punishes drivers if the packages are lost or stolen so they try to hide
them.

~~~
sailfast
Amazon 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.

~~~
KallDrexx
This has been useful to us because you can clearly show from the photo that
Amazon delivered the device to the wrong house, and therefore a refund gets
issued with no hassle.

------
dubcanada
I 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
I 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
I 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
As 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.

------
jshaqaw
It’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.

------
noncoml
Lately 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.

~~~
Spivak
I actually prefer this than the re-delivery attempts. Look, if something was
"wrong" the first time it's probably going to stay wrong the next n times they
try. I would just rather it be in a fixed location that I can pick up any time
than wait another week or so until they give up.

~~~
noncoml
What’s the point shopping online then? You might as well go out and buy it if
you have to drive.

~~~
kevin_thibedeau
Retail stores don't stock most of the things I buy online. Sometimes I _try_
to find something local and give up. I need a 5mm glass fuse for a shredder.
All the auto parts stores only carry 6mm. Box stores don't have small fuses.
Amazon got the sale.

------
Postosuchus
Personally, 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
Depends 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.

------
blinkingled
Might 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
Alternatively 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.

------
heroHACK17
'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
Yeah, 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?

------
bstar77
The 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
They already do this for a large portion of Prime deliveries in India. Don't
see why they wouldn't expand it to other countries.

------
e0m
"Amazon.com represented less than 1.3 percent of total FedEx revenue for the
12-month period ended December 31, 2018"

~~~
cabaalis
I 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
For 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.

------
bitxbit
To this day, I don’t understand why Wal-mart didn’t buy UPS a decade ago.

------
amelius
> 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?

------
andrewfong
Good 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.

------
jjellyy
Good !! Fedex is the only carrier that fucks up my deliveries !

