Emails shed light on Amazon's attempts to woo shippers away from FedEx and UPS by forgoing some fees, like residential surcharges, which can be $3.80+/parcel
New seven-day delivery service offers to pick up parcels and bring to residences, without added fuel or weekend surcharges
Context & Ripple Effects
This story closes a loop opened years earlier: back in late 2015, rising package volumes and costs had Amazon seeking alternative delivery routes and straining its ties with UPS, and mid-2015 reporting described an app idea that would pay ordinary people instead of carriers to move parcels. The emails reported here show that search for independence matured into an offensive play — not just moving Amazon's own boxes, but courting other shippers away from FedEx and UPS.
The weapon is price structure rather than headline rates: waiving residential surcharges that can exceed $3.80 per parcel, plus fuel and weekend fees, on a new seven-day pickup-and-residential-delivery service. That matters because the same playbook later scaled — Amazon restarted Amazon Shipping in 2023 to carry packages from other websites, and by 2026 a renegotiated USPS deal had Amazon cutting USPS volume by 20%.
First-order effects
- Shippers gain a credible third option whose all-in cost undercuts FedEx and UPS precisely on the surcharges those carriers rely on for margin — residential, fuel, and weekend fees are exactly where the comparison bites.
- FedEx and UPS face direct volume erosion at their most profitable fee lines, forcing them to compete on surcharge waivers they had treated as non-negotiable.
Second-order effects
- If shippers defect on price structure, FedEx and UPS must either discount their own surcharges — compressing industry-wide parcel margins — or cede the residential-heavy e-commerce segment to Amazon's network.
- Amazon's carrier ambitions feed on themselves: every shipper won adds density to its network, lowering its own per-parcel cost and making the next round of fee-waiving offers cheaper to sustain.
Third-order effects
- The pattern points toward Amazon evolving from the carriers' largest customer into their structural competitor — consistent with the later USPS renegotiation that cut Amazon's USPS volume by 20% — reshaping the parcel market around one vertically integrated retailer-logistics operator.
- Surcharge-based pricing, long the profit engine of US parcel carriers, becomes the vulnerable layer: if a scale player can absorb those fees, the industry's pricing architecture itself is what erodes, not just any single contract.
The trend: Amazon is converting its in-house logistics build-out into a third-party parcel carrier business, attacking incumbent carriers through fee structure rather than headline rates.