Amazon Shipping, the parcel service Amazon recently opened to all businesses, is pricing below FedEx and UPS for residential ground shipments. That puts a new low-cost option on the table for shippers rebidding their carrier mix. The reported savings, up to $6 per package, come from parcel audit vendor Loop, not from Amazon’s own rate card.
What Loop says: Loop told Supply Chain Dive its clients are saving up to $6 per package on eligible residential volume compared with similar FedEx and UPS services. For one large retail customer, Loop said Amazon could handle more than 90% of distribution while delivering annual savings of over 33% compared with FedEx.
Loop has not published its methodology, sample size or lane data behind those numbers.
The surcharge gap: Amazon markets pricing with no residential surcharges or weekend delivery fees. UPS and FedEx layer residential and fuel surcharges on top of base rates. Amazon says it waives those fees, making that the main selling point of the service.
The tradeoffs: Amazon Shipping is a ground-only service. It offers delivery in two to five days, seven days a week, across the contiguous US. There is no overnight or express option. Coverage and zone restrictions also apply. Retailers may also hesitate to give a direct competitor access to their shipping data.
The two-way pull: Amazon is opening its network to outside businesses the same year it is pulling volume from its own carrier partners. Amazon and USPS reached a delivery deal in April that cut Amazon's package volume with the Postal Service by 20%.
UPS also removed about 1 million Amazon packages a day from its network in 2025 to improve margins. It plans to reduce another 1 million packages a day in 2026. UPS has not said where that volume will go, but Amazon’s own delivery network is the most likely destination.
The parcel push mirrors Amazon’s LTL freight network, which it opened to outside businesses nationwide in June. Amazon says American Eagle Outfitters uses its parcel shipping service, while Procter & Gamble and 3M use its freight services. Lands’ End uses Amazon’s fulfillment network.
