Amazon.com Inc. (NASDAQ:AMZN) is preventing its third-party sellers from using FedEx’s ground-delivery shipping for Prime shipments. This marks the latest escalation of the ongoing rivalry between the companies.
Amazon restricts FedEx’s ground service for Prime shipment
The e-commerce retailer has cited a decline in performance as they head into the final lap of the holiday shopping season as the reason for the block. The company has indicated that the ban on the use of FedEx’s Ground and Home services begins this week and will continue until there is an improvement in the delivery performance of the shipping methods. The company has not indicated how many packages the restriction could affect.
However, Amazon has indicated that sellers can use FedEx’s Express service such as air transport for Prime orders. Equally, they can use FedEx’s Ground and Home shipping services for standard orders and non-prime shipments. Currently, third-party sellers account for over 50% of the goods on amazon’s e-commerce platform.
A FedEx spokesperson indicated that although the ban affects a small section of shippers it nonetheless limits options for small businesses on days when shipping demand is high. As a result, this may compromise the ability of the businesses to manage their businesses and meet the demand of customers. The spokesperson added that their Ground shipping stands ready to support customers and is poised to deliver record-breaking volume this festive season.
FedEx halted express shipping in the US with amazon
Tensions have been brewing between the two companies since June when FedEx canceled delivery agreements with Amazon. FedEx said it would end its ground delivery service with amazon in August. This came after it had already halted Express shipping in the US with Amazon in June. The announcements came after Amazon had indicated that it was planning to fast-track Prime shipping to a day on millions of items.
Amazon is having its plans of having a delivery network of its own. The company is building a $1.5 billion air hub in Kentucky that will open in 2021 and will house over 50 aircraft. This is a move aimed at reducing reliance on FedEx and UPS.