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well as those of third-party merchants using Amazon’s services. Amazon has been taking merchant business that used to belong to FedEx and UPS, according to Jindel. In addition, many of Amazon’s direct customers were once the customers of retailers that used FedEx and UPS, Jindel said.

Still, for retailers already competing with Amazon, using its delivery services would be akin to sleeping with the enemy.

If history is any guide, UPS and FedEx will find ways to surmount the e-commerce challenge. They raise their published rates annually, though they often agree to givebacks in return for large volumes. They have squeezed retailers in recent years by charging more for shipments that fail to meet certain dimensional parameters, and they continually impose an array of “accessorial” charges, fees for services beyond the basic delivery.

The carriers also laid down the law this past peak season, putting retailers on notice that the rules of the game had changed. Both adjusted their time-definite express delivery commitments during the critical final week before Christmas, directing drivers to deliver by the end of a committed day rather than by a specific time, according to SJ. In addition, FedEx Ground suspended its ground service guarantees for the entire peak season, while UPS did the same for Cyber Week (the week after Thanksgiving) and Christmas week, according to the firm. The adjustments to the delivery guarantees were designed to blunt the cost impact of residential delivery spikes rather than to maintain profitability by levying additional charges, SJ said.

Perhaps most significant, both are working to generate sufficient e-commerce delivery densities to reduce costs and capture more of the last-mile e-commerce traffic that they have historically tendered to USPS. The companies have operational alliances with USPS where residential packages are inducted deep into the postal network for last-mile delivery by postal carriers. USPS prices the service cheaply because it is already required by law to serve every U.S. address and can pick up or drop off parcels along the way. Though the model is popular with FedEx and UPS customers, the carriers don’t generate much revenue from it and have to share what they take in with USPS.