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FedEx and Amazon flirted with the idea of working together again on package returns, according to a Wall Street Journal report.
Driving the news: The talks centered on turning FedEx’s retail locations into a returns drop-off center for Amazon packages.
- This model mirrors Amazon’s partnership with United Parcel Service (UPS), which handles millions of returns for Amazon annually.
- Despite the negotiations, the companies did not clinch a deal.
What they’re saying: "We are always open to having commercial conversations when approached with an opportunity by current or potential customers," a FedEx spokesperson told FOX Business, signalling a willingness to explore future collaborations.
Why it matters: Although the talks didn’t bear fruit, they underscore the growing headaches ecommerce returns pose for retailers.
- Retailers estimate that between 20% and 30% of all online orders are returned, and it costs them on average, about $33 to process a return.
On the other hand, carriers are increasingly investing and partnering to help retailers cut their returns costs.
- Last year, UPS acquired reverse logistics leader Happy Returns for $465 million, expanding its network of return drop-off sites to over 5,000 locations.
- Uber also launched the "Return a Package" feature, simplifying the return process for consumers.
Flashback: FedEx and Amazon's partnership, which spanned decades, came to a halt in 2019 as Amazon developed its delivery network sufficiently to handle a majority of its own deliveries.
- FedEx, meanwhile, pivoted to serving a wider e-commerce market beyond Amazon.
The big picture: The parcel delivery industry has been in a slump post-Covid lockdowns.
- In an effort to boost volumes, carriers, including FedEx, are trying to win market share in the growing e-commerce returns market.
