Amazon Blocks Third-Party Sellers From Using FedEx for Prime Shipments, Citing Performance Issues
In the midst of the holiday sales crunch, Amazon has prohibited third-party sellers from using FedEx's ground delivery network for Prime shipments through the holidays.
Amazon informed those sellers of the change in a message Sunday night, the Wall Street Journal reported. Shares of Amazon AMZN were up 0.36% on Monday, while shares of FedEx (FDX) - Get FedEx Corporation Report slipped 1% on the report.
The change applies to FedEx's Home and Ground delivery services, and came as a result of a slip in FedEx's delivery performance, according to Amazon. Third-party sellers may still opt to use FedEx's faster, but more costly delivery services.
Amazon and FedEx ended a contract earlier this year to manage first-party deliveries in the U.S., but third-party sellers may still opt to use FedEx services.
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"The overall impact to our business is minuscule,” a FedEx spokeswoman told the WSJ.
Amazon and other retailers are facing a particularly challenging holiday delivery schedule this year, given a shorter than average time frame between Thanksgiving and Christmas. Amazon, Walmart (WMT) - Get Walmart Inc. Report and others have also introduced free next-day shipping for certain orders this year.
FedEx reports its third quarter financial results on Tuesday, Dec. 17.
