Amazon restricts FedEx Ground use for some sellers' Prime orders, cites transit changes

Max Garland
Memphis Commercial Appeal

Amazon is restricting the use of FedEx Ground for certain Prime orders from its third-party sellers, citing changes in transit times.

When FedEx Ground and its FedEx Home Delivery service can’t meet the two-day delivery commitment for “Seller Fulfilled Prime” orders, it won’t be available as a shipping option, Amazon told sellers in an email.

Amazon said in the email this is happening because FedEx made recent changes to its shipping speeds, adding an additional day for some Ground shipping lanes during the peak season. The transit time change is in effect from Nov. 2 to Jan. 3, it said.

“As a result, FedEx Ground and FedEx Home Delivery will not be available for Seller Fulfilled Prime shipments when these services do not meet the Prime promise,” the email said.

In a statement, FedEx said the transit time extension for certain lanes "will provide increased flexibility allowing us to optimize the use of our capacity and best serve the needs of all of our customers during this busy time."

Workers sort through packages at Amazon's Mem1 fulfillment center on Wednesday, Oct. 7, 2020.

"The changes will be communicated on a customer-by-customer basis as appropriate," the Memphis-based company added.

Merchants’ “Seller Fulfilled Prime” (SFP) products have a two-day delivery commitment at no extra charge for customers of the Amazon Prime membership service, Amazon's website says. Businesses in the program deliver directly from their own warehouses to customers. The products are displayed with a Prime badge.

“The temporary extension of FedEx Ground transit times in certain lanes does not impact an SFP merchant from choosing FedEx Ground if the Prime badge isn’t present," FedEx said.

In December 2019, Amazon temporarily restricted third-party sellers from using FedEx Ground for Seller Fulfilled Prime shipments for about a month. The company said in a statement it wanted to make sure customers received their orders on time.

FedEx said at the time it affected “a very small number of shippers” but could compromise small businesses’ abilities to meet demand. Earlier that year, FedEx ended its Express and Ground shipping contracts with Amazon.

Hayley Winningham checks packages as they pass by her on a conveyor belt Wednesday, Dec. 4, 2019, at the FedEx Ground Olive Branch hub.

“It was the correct decision to end these contracts — which were not long-term in nature and were declining in profitability — and train our eye on the larger e-commerce market,” Chairman and CEO Fred Smith said in a letter to shareholders.

Both FedEx and Amazon have grappled with elevated shipping volumes during the COVID-19 pandemic, as more consumers shop online and avoid in-store traffic. FedEx Ground has been the biggest beneficiary of the online shopping boom among FedEx companies.

FedEx has ramped up its hiring efforts, including at its Express World Hub in Memphis, to meet demand during the holidays. An Amazon manager in Memphis said in October the company’s operations shouldn’t change too much when customers begin ordering holiday gifts.

Max Garland covers FedEx, logistics and health care for The Commercial Appeal. Reach him at max.garland@commercialappeal.com or 901-529-2651 and on Twitter @MaxGarlandTypes.