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Amazon is pushing to quickly grow volume for its U.S. delivery offering through lower shipping rates for prospective customers, parcel pricing experts told Supply Chain Dive.
Amazon Shipping, the company’s parcel delivery service now available to all customers, has offered proposals with prices competitive with or lower than FedEx and UPS, said multiple experts working with shippers in negotiating and handling shipping contracts.
Logistics data platform Loop is seeing clients save up to $6 per package by moving eligible residential volume to Amazon Shipping versus comparable FedEx and UPS services, Matt Sumowski, who works in strategic solutions at Loop, said on LinkedIn.
In an interview, Sumowski said Amazon Shipping’s playbook has often involved enticing shippers with surcharge waivers and less complex pricing versus FedEx and UPS. He cited Amazon’s offer to one of Loop’s large retail clients using FedEx as an example.
“Amazon was able to service 90-plus percent of this specific client’s overall distribution,” Sumowski said. “In that 90% of coverage, they were able to save 33% plus annually beyond FedEx.”
Beyond FedEx and UPS, Amazon Shipping is even “undercutting” the U.S. Postal Service on rates for packages weighing less than a pound, a piece of the market the agency has long held a pricing edge over, according to Hannah Testani, CEO of freight audit and payment company Intelligent Audit.
An Amazon spokesperson said transparent pricing, along with no residential surcharges or weekend delivery fees, has helped drive savings for shippers and volume to the service.
“The momentum tells us businesses see the value it already offers, and we’re just getting started,” Jeff Helbling, VP of Business and Go-to-Market at Amazon Supply Chain Services, said in an emailed statement to Supply Chain Dive.
How Amazon Shipping compares to FedEx, UPS
In 2024 and 2025, Amazon Shipping had a more narrow focus, looking to win business from shippers with packages below five pounds and destined for metro areas, said Jack McCrum, director of optimization and analytics at Reveel, which offers a parcel shipping intelligence platform.
Amazon Shipping’s pricing push became more prevalent this year as it expanded its availability to non-Amazon sellers. In a period of climbing FedEx and UPS rates, the service has aimed to woo a wider range of prospective clients with lower fuel surcharges and other pricing perks, McCrum said.
“They’re aggressively just going after UPS and FedEx right now, just to carve out that market share, and they’re willing to negotiate on that revenue per piece,” McCrum said of Amazon Shipping.
Alternative carriers have often touted straightforward rates and minimal surcharges as an edge over more established delivery options. But despite Amazon Shipping’s competitive pricing, it doesn’t yet feature the full scope of shipping capabilities that FedEx and UPS offer, said Loop’s Adi Karamcheti. Amazon Shipping currently offers two-to-five-day ground shipping in the contiguous U.S., which means shippers have to consider alternatives for services like overnight delivery.
“The momentum tells us businesses see the value it already offers, and we’re just getting started.”
Jeff Helbling
VP of Business and Go-to-Market at Amazon Supply Chain Services
For now, Amazon Shipping is best suited for high-volume retailers with lightweight packages, Intelligent Audit’s Testani said. FedEx and UPS are still strong options for parcel shippers, particularly those with express shipping needs or with more complex requirements like healthcare firms, she added. Both carriers have been willing to cede some lightweight e-commerce business while prioritizing shipments from more profitable industries.
“Right now, UPS and FedEx [are] saying, ‘I want the health care; I want the express shipments; I want the shipments that people are going to pay a premium for,’” she said.
Negotiating with Amazon Shipping
Amazon Shipping’s aggressive position on pricing may not be a permanent one. However, if service remains reliable and rates stay competitive versus the overall market, customers are more likely to stick with Amazon Shipping even if charges increase, Sumowski said.
Additionally, Amazon Shipping is looking for volume commitments from shippers, which means prospective customers have to consider how implementing Amazon would impact their current carrier mix.
“This becomes a little bit of a balancing act for a lot of clients, of how much can you commit versus how much are you going to backslide in your other direction with your incumbent [carrier],” Sumowski said.
Sumowski advised shippers to get an idea of what Amazon Shipping’s pricing will entail beyond the early stages of the relationship, adding that they should approach contract discussions with Amazon like they would with UPS or FedEx.
“You’re going to want certain commitments, you’re going to want certain language, certain things in writing,” he said. “Just because they have a few less surcharges doesn’t mean you should treat the overall terms of the agreement or negotiation any differently.”
